The four pillars of legacy planning

By dmlavinsky2b4d39

What does the word “legacy” mean to you? The dictionary defines legacy as “something from the past, handed down from previous generations, an inheritance." According to the Allianz American Legacies Study1, less than one-third of baby boomers and their parents have had a discussion on the four pillars of legacy planning. These pillars are:
  • values and life lessons
  • Personal possessions and emotional value
  • Financial assets and real estate
  • Instructions and wishes to be fulfilled
1. Values and life lessons

Family stories and traditions are the most meaningful pieces of family that gets passed from generation to generation. Stories handed down from the past instill a sense of ethics and morality. Thanks to modern technology, we can film Grandma’s cooking lesson, assemble Internet scrapbooks with digital pictures, and record Grandpa’s war stories to pass to the next generations.

2. Personal possessions and emotional value

This pillar includes items of little financial value, but high emotional value. A beat-up baseball glove evokes memories of playing catch on the front lawn with Dad. Baby sweaters hand-knit by Grandma symbolize love and devotion.

Fights about who gets what item can divide families and ruin relationships. It is important to have the decisions on who receives each possession in writing to avoid future conflicts and dashed expectations.

3. Financial assets and real estate

What do Anna Nicole Smith, the Pritzker Family, and Brooke Astor all have in common? Destructive fights over estates. Equal distribution of inheritance is often seen as the best way to avoid conflict. Expectations are raised for equality, yet parents can use the inheritance as a source of power and control. Often, an elder will exert control by threatening disinheritance. The most common reason for disinheritance is substance abuse. Equality can be perceived differently by the parties involved. If one sibling is the caregiver and does all the work, equal shares among the siblings will be a real cause for resentment.

4. Instructions and wishes to be fulfilled

This pillar would include directives such as funeral instructions, ensuring that children have enough money to finish their education, and guarantees that an elderly surviving spouse will be cared for by children. These wishes are often passed along verbally and can create confusion and controversy among surviving family members. The greatest source of family conflict involves funeral arrangements. When families sit down and discuss the motives behind plans and intentions, then the trauma of misunderstandings can be avoided.
How to initiate legacy planning discussions

Why aren’t more families having these discussions? The study found that personal discomfort with the topics of death and inheritance are the major obstacles. Boomers are uncomfortable discussing inheritance and elders feel that talking about death would be upsetting to their children. Elders felt that bringing up this topic would frighten their children into thinking that they were seriously ill or dying. Boomers felt that it would indicate greed and anticipation of death.

The final point of the study is that all families want advice. They want someone who listens carefully, understands their dilemmas, and explains things in a straightforward way. They want someone who can maneuver a family through the minefields of conflict and emotional dynamics.

How do your clients want to be remembered? Help them create a legacy plan to ensure that the memories they leave behind are happy ones.

1The Allianz American Legacies Study, 2005. Ken Dychtwald and the Age Wave conducted interviews with 1,345 elders and 1,282 Baby Boomers.