Estate Planning v Legacy Planning

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A couple of weeks ago, Sarita and I were at a conference for major donors sponsored by one of the charities we support.

Henry Doorn, president of the Barnabas Foundation, noted there are only three places your money can go when you die: to your heirs (family, friends), to charity, or to the government. He didn’t quite put it this way, but my mind put his follow-through question in the form of Evangelism Explosion’s standard opening. As I remember it, he asked, “If you were to die tonight, do you know for sure where your money would go?”

Sarita and I spent a lot of money back in 1998-99 getting an estate plan put together. But when Doorn asked the question, I realized, in my heart of hearts, that I didn’t know the answer!

I knew we had done everything possible to minimize taxes and maximize transfer to our heirs, our children. But we had done nothing to ensure anything goes to any of the charities we care about. And, worse,as we were about to realize, we had done nothing explicitly intended to ensure our children understood our charitable priorities, purposes, desires, dreams, and so forth.

Part of the reason for this, as I realized when I spoke with Doorn later that day and as I read Ron Blue’s Splitting Heirs, Sarita and I have been dealing with estate planning professionals and not, as Blue refers to them, “wealth transfer” professionals, or, as others refer to them, “legacy planners.”

I have modified Blue’s summary of the differences as found on page 38 in his book:

Wealth Transfer or Legacy Planning

. . . Focuses, as a goal, upon transfer of ownership.

. . . Considers, as first priority, the impact of wealth transfer on recipients.

. . . Expects implementation–i.e., the transfer of wealth–to begin now.

. . . Involves family input first and professional advice later. [Note: As I am learning, there are professionals who can help us work through the process of acquiring family input; but their role is to help us acquire family input--perhaps along with some education about the breadth of options we might want to consider; but it is not, at that point, to advise us about which options are "better" or "worse." . . . Only after receiving the family input will such a professional seek to advise us about the pros and cons of the different options.]

. . . Makes decisions based on considerations of Godly stewardship.

. . . Seeks to bring honor to God.

Estate Planning, on the other hand,

. . . Focuses on retaining control of assets as long as possible–possibly, even, beyond the grave.

. . . Considers, as first priority, the impact of wealth transfer on the donor and the estate.

. . . Expects implementation–i.e., the transfer of wealth–to begin at death.

. . . Involves professional advice first and family input later. (”Here’s what the attorney suggests; what do you think?”)

. . . Makes decisions based on tax implications.

. . . Seeks to bring honor to . . . “Whatever.” –It’s indifferent. The attorney or other professionals involved in the process are wholly “agnostic” in this matter. They certainly don’t view themselves as having been brought into the process to be spiritual advisors!

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This entry was posted on Saturday, November 11th, 2006 at 12:04 pm 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.