How to leave a legacy

Why consider legacy now?

My question may sound morbid, but as a mother who lost her mother, I know very well that life is not eternal. Because of my history, I have always been proactive about my finances. I have life insurance and a will, and I make sure that no matter what happens in the future, my daughter will be taken care of.

While finances are an important part of the legacy puzzle, so are the intangibles – memories, experiences and values. A legacy should include both financial and emotional components so that your loved ones can take comfort in the assets you leave behind and the values ​​you pass on.

Here’s a primer on how to leave a legacy for your loved ones.

Take control of your finances (if you haven’t already)

We all know children are expensive. Whether you’re expecting your first child or your youngest, managing a growing family’s budget can be difficult. A recent survey showed that 53% of millennial parents have less than $5,000 in savings.

Saving money is hard, but don’t bury your head in the sand when it comes to your finances. Understand what you own, including retirement accounts and investments, and what you owe, including student loans or other debt. Knowledge can help you choose a savings strategy when you understand what’s going well and which areas may need more attention.

Make worst-case scenario plans

How would you raise your children if you or your partner died unexpectedly?

“What if” scenarios may be difficult to think about, but you must do so if you want to develop a realistic emergency plan to protect and feed your family.

Life insurance is part of this emergency plan.

The one-time benefit from a life insurance policy’s death benefit can help your loved ones pay for daily expenses, child care, future education expenses, and more. The peace of mind you gain through a policy may be more affordable than you think, especially if you are in your thirties and may be thinking about starting a family or leaving a legacy for future generations.

For example, a 20-year, $500,000 safe haven term policy issued by MassMutual or its subsidiary CM Life for a healthy 30-year-old woman costs about $15 per month. That’s less than your online TV streaming service or a two-bowl acai lunch. A 36-year-old man in good health can buy a 20-year, $750,000 term life insurance policy for just $30 a month. Your rate will depend on a range of factors, including your age and overall health.

If you’re wondering how much (or less) your premiums might be, you can get a free life insurance quote online.

Make plans for your future

Of course, you want to give your child everything. One of the smartest ways to provide them with a long-term financial legacy after your death is to develop a solid retirement savings strategy.

Helping children get an education is an admirable goal, but there is no such thing as a retirement loan. If you don’t plan financially for the future, your children may one day have to support you. One of the best gifts you can give your children is freedom from future financial burdens.

Review your employer’s IRA or 401(k) plan, if applicable. If available, please consider contributing at least enough to qualify for the full game.

You can also set up your own IRA, traditional (tax deferred) or Roth (tax paid immediately).

A healthy retirement portfolio has two benefits: (1) you are able to use the funds in your portfolio to meet your financial needs in retirement; (2) if your children are beneficiaries, the funds in your portfolio will be transferred to them, provided you leave before using them. Working with a financial planner can help you find the path that’s best for you.

make a will

Everyone needs will, especially parents. Not only can a Will name the guardians you want to care for your children, but your Will can also open the door to valuable conversations with your loved ones. When you lay your cards on the table, you eliminate confusion and clarify what is valuable to you.

The monetary value of the items in your will does not matter. When you leave a vinyl record collection, a treasured guitar, or a journal collection to a child, you make it clear how much you respect that person and trust that he or she will have the things you cherish most.

Building a legacy through charitable giving

When drafting your will, you may wish to consider the charities to which you may want to bequeath assets. Although you may not have the means to donate now, a legacy gift will be greatly appreciated and will keep your name alive throughout your lifetime.

Naming a charity in your will can also help family and friends know where to make donations in your name in your memory. My mother was the director of our town’s senior citizen center and before she died she asked that donations be made to the center in lieu of condolence flowers. I love knowing that her memory exists in a space that was so important to her and I feel some small connection to her every time I drive by the building.

If you’re interested in leaving a charitable gift, learn how to donate your assets to a charity, educational institution, or nonprofit organization after your death and start the conversation with your loved ones today. Make your intentions clear and include them in your will immediately.

Build a legacy of value

Your inheritance doesn’t have to be money left to others. It’s the lessons you teach, how others remember you, and how you live your life.

My mother’s legacy is her commitment to others, her love of adventure, and her belief that life should be fun. When the weather is nice, if I take a day off, drop my daughter out of day care, and take a spur-of-the-moment trip to the beach, I’m carrying on my mother’s legacy. I even told my daughter how much her Grandma Gayle would love this day.

I want these memories to stay in my daughter’s mind. Creating this intangible legacy is vital to me, so I prioritize family time whenever possible.

Start now

I would rather take a day off and go to the beach than focus on financial matters, especially when I fervently hope that in a few decades my IRA will not require a will or beneficiaries. But I know that if I get these things right now, I can actually enjoy spending time with my daughter.

A huge comfort after my mother passed away was that all her paperwork was in order. As my family and I dealt with grief and tried to imagine a future without her, we didn’t have the burden of financial chaos or infighting over “things.”

I want to do the same for my daughter. I am building my legacy to ensure I can give her the same emotional and financial freedom.