A full(er) legacy plan

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The further I go with legacy planning, the more detailed I find a plan can–and probably ought to–be.

Here’s a summary of a plan I found in Tracy Gary’s Inspired Philanthropy. Here are the kinds of things she believes a complete legacy plan should include. How inspired are you?

First, any legacy plan, says Gary, should include a “prudent plan” that takes care of basic financial issues until you die. A “prudent plan” includes,

Cash flow and budget planning through “retirement” (whatever that may mean . . . even if we live to 120 years old). –This consists of an analysis that, to the best of our ability, ensures we have enough to “see us through” whatever life may send our way. That doesn’t mean stashing an extra $3 million away “just in case.” But it does mean taking care to see that we aren’t deliberately placing ourselves in a position where other people will have to take care of us (when, with a little judicious planning, we could easily take care of ourselves).
If you’re still working, disability insurance. (According to the Social Security Administration’s Disability Planner, “Studies show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age.” I have no idea what the probabilities are by the time someone reaches 50 or 60 years old.)
Life-insurance or other funds enough to take care of those left behind. At least enough to cover your burial!
An investment plan and strategy that provides guidance for investing within the limits of your own tolerance for risk.
An income tax strategy that minimizes taxes in keeping with the law.
Property and casualty insurance.
Liability insurance. Umbrella policies are often wise investments!
A basic estate plan: up-to-date wills, powers of attorney, health directives, end-of-life wishes (Burial or cremation? What kind of memorial service would you like–if it matters to you. Etc.), a “final note or testament conveying thoughts and feelings for those you love,” and so forth.

But beyond the so-called “prudent plan,” an excellent legacy plan includes far more than these basic features. Gary suggests an excellent plan–what she calls an “inspired” plan–also includes a giving plan:

“A clearly articulated vision, with goals and priorities.”
An advisory teamto help you achieve your goals, vision, purpose and priorities.
A business succession plan (what James Hughes is eager to note should be more than a transaction but, instead, “an integrated act within the family’s long-term strategic goal of dynamically preserving its financial capital. [It is a] part of a twenty- to fifty-year long-term plan for the success of the enterprise.” [Hughes, Family: The Compact Among Generations, p. 179]).
Gift planning, “including lifetime gifts and bequests, and through successive generations.”
A family government (or governance) system . . . most especially if there is a family-owned or family-controlled entity involved (whether a for-profit business, a foundation, a trust, or some other entity).
“Education and mentoring for heirs and the roles they will play” in any family entities.
“Education, mentoring, and role modeling for Ayers and the roles they will play in the community, not only as holders of jobs and possessors of wealth, but also as active citizens and community leaders.”
A history and an established practice of family meetings (what Gary calls “opportunities for discussion with advisors, family, and nonprofits or heirs on your giving and legacy intentions”). [I am astonished that Gary only speaks of discussions related to "giving and legacy intentions" and not deliberations associated with all the other issues a family should want to discuss in regular family governance meetings. But Gary does remind us that family meetings should, often, include outside advisors and, potentially, representatives from agencies that the family supports.]
Ongoing monitoring, evaluation and discussion of the plan with, for, and by the plan initiator, heirs, advisors, and other interested parties.

How are you doing with your legacy plan, is it more than a mere prudent estate plan? Have you begun to incorporate a full-blown giving plan within it?

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This entry was posted on Wednesday, September 24th, 2008 at 11:56 am and is filed under estate planning, legacy planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.