By Alan Pratt

Provided by CN Building Adult Ministries Resource Center

Your legacy is much more than the tax-efficient transfer of your net worth.

People often think of their legacies as what they leave behind, and while that is technically true, what we actually leave behind is the life we live today. Your legacy is much more than the tax-efficient transfer of your net worth. The best philosophy for estate planning centers on the story of your life today. We call it “legacy planning.” Your legacy plan is intended to extend that story into tomorrow.

Legacy planning begins from your heart, as you assess what relationships and goals truly important in your life. If estate planning is going to extend that part of yourself into the future to create a legacy, it has to begin with assessing your values. Legacy planning doesn’t start with focusing on tax strategies or the things that we call “tools” to extend the reach of your story. It starts with the story itself and gives you the opportunity to decide how your story can continue most effectively from this day forward within your family, the organizations and the community of non-family members who are important to you.

Just as there are tools that help you minimize your estate tax exposure, there are tools that can help you better understand your own story. For example, we typically help our clients review their lives, decade by decade, reflecting on the angels and heroes that have touched their lives. We identify enduring principles that have directed their life decisions—principles that they feel are important to pass on to others. These principles, to the extent they can nurture them in the lives of others, are a more important legacy than the asset values alone.

While all of us spend time planning in our businesses, a good portion of our lives happens almost by default. Your legacy plan not only mirrors the positive aspects of the life you’ve lived, it can help you live the remainder of your life more deliberately so that your story begins to take clearer focus for others. It is this focus on others that becomes particularly important.

A good legacy plan is selfless. It focuses on other people and organizations because they are who and what remain to carry your story forward. Family relationships often grow stronger through the legacy planning process. Unfortunately, conventional estate planning can be self-focused and used to set strategies that control the financial future of others. As a result, it leaves toxic relationships in its wake. But by focusing the plan on relationships today, and by including these people in the dialogue, healthy relationships are left in the wake of your life.

You will leave your story imbedded within the stories of others around you, whether you plan to or not. Everyone does. Our stories are left behind like fingerprints on the lives of others. The question is, “How will your story touch their lives?” With good planning, you will leave your story imbedded in positive ways in the lives of people you will never meet.

Everyone has an estate plan — either by default or by design. You can plan your estate with your family or at your family. Values-based legacy planning builds your relationships stronger today, and you will enjoy that benefit while you are still living. You will strengthen intergenerational communication and trust and may even be able to restore relationships that are damaged. Unfortunately, too many people choose to plan at their family, using their wealth as a means to control the futures of their family members.

Planning by default will force your family to “sort out the mess” after you are gone. Plenty of families have been damaged because no one wanted to work through the financial decisions of their estates with family members. Let me encourage you from years of experience with hundreds of families. Planning with your family can be one of the most enriching experiences of your life.

Why do you suppose so many people have such a difficult time talking about their wealth with other members of their family? Could it be they lack the tools to keep the conversation healthy or that damage exists that needs to be repaired in order for the conversation to happen? We’re all smart enough to know that none of this will happen by itself. You may need someone to help walk your family through the process.

Some of the tools good planners use are intended to help families genuinely begin to understand the unique abilities, character traits, and the deeper aspirations of other family members. That knowledge will result in a legacy plan that genuinely helps family members achieve life-long dreams. In this way, you honor your family members’ unique gifts through the gift you give. Your story truly lives on in theirs without being overpowering. Instead, you support those things that you both agree are important based on your individual stories.

The best part of planning your legacy now, is that you get to see it flower while you’re here.

Alan is President of Pratt Legacy Advisors in Bellevue WA. An ILC— Anaheim Workshop Collection presenter, he also serves as President of The International Association of Advisors in Philanthropy, a not for profit membership organization that builds philanthropic capacity through collaborative programs and projects that unite financial advisors, charitable organizations, foundations, donors, and wealth planners in a common goal.

© 2005 American City Business Journals Inc.