Passing along financial assets to your loved ones is at the core of the estate planning process, but there are some other things that you can take into consideration that can be quite meaningful. If you engage in the process of legacy planning, you can take a comprehensive approach and do everything possible to leave a lasting influence.
Before we get into matters of the heart and mind, we should touch upon the potential impact of the federal estate tax. Your financial legacy can be significantly eroded if you are exposed to this tax, because it carries a 40 percent top rate.
This tax is only applicable on asset transfers that exceed $5.43 million, and $1.4 million in Minnesota, but your real estate is part of your estate for tax purposes. Many people in our area own large, valuable tracts of land, so you could be exposed to this tax even if you do not consider yourself to be extraordinarily wealthy.
Fortunately, there are things that you can do to reduce your tax burden if you are exposed.
Giving to worthy causes is one of the most rewarding things that you can do, and charitable giving can be an important part of your legacy plan. There are various different methods that can be utilized. Donor advised funds can facilitate efficient giving, and there are also charitable trusts that can potentially provide tax benefits. The creation of a private foundation would be another option.
If you are in a position to do so, you could provide educational opportunities for your younger family members so they can achieve their full potential as human beings. This is a fantastic way to have an influence even after you are gone.
Personal Memoirs and Family History
You have memories that your younger family members cannot access if you do not share them. If you record your personal memoirs in writing, your loved ones will be able to gain a deeper understanding of your formative experiences. Plus, you will be sharing the history of your family, and many people are very interested in exploring their roots.
Your legacy plan could also include an ethical will. With this type of will, you share your moral and spiritual values. During difficult times, your loved ones will be able to access these “rules to live by,” so your wisdom will be available to them even when you are not around to provide advice.
Obtain More Detailed Information
If the subject of legacy planning is interesting to you, we have a valuable resource that you can access through this website. Our firm has prepared an in-depth special report on legacy planning, and you can get your copy for free.
Click the following link to get your copy of the report: Grand Forks ND Legacy Planning.