Three Tips for Leaving a Financial Legacy
"If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed” (Edmund Burke)
If we have achieved any level of success in life, it is natural that we want our children and grandchildren to enjoy some its fruits. Having spent a lifetime building wealth, we want to feel that our heirs will also benefit from it after we are gone.
It is, however, important to see leaving a financial legacy as part of a comprehensive financial plan. Know what you want to achieve, and how you plan to achieve it.
Here are three important things to think about when considering the legacy you will leave.
- Look after yourself first
It might seem counter-intuitive, but the best way of ensuring that you leave a financial legacy is to ensure that your own retirement needs are taken care of. Unfortunately, most South Africans will not retire with enough money to replace 75% of their salaries. That means that they will struggle to cover their own expenses, never mind have anything left over for anyone else.
Leaving a legacy therefore starts with having a plan for your own retirement. This means making sure that you are providing for yourself, and that you will have an income for as long as you need it.
Only if you do that can you think about what you might like to do with anything that is left.
- Have your estate plan in order
One of the best gifts you can give your family is a well-crafted will and a clear plan for dealing with your assets after you pass away. Keeping your will updated will ensure that the people you want to benefit from your legacy are in fact the ones that do.
Make sure that your executor knows about all your assets and leave clear instructions for how they should be divided. It is often worth being clear with everyone beforehand about your wishes so that when the time comes there are no ugly surprises, which inevitably lead to animosity.
- Insure your life
While you are still working, the need for life insurance is clear. Your family will need some way to replace your income.
However, even after retirement life insurance can be a key part of an estate plan. Your family may need to cover significant ‘final expenses’ such as paying off debts, or medical and funeral costs. They may also need cash to pay estate duties and executor fees without having to sell assets.
Life policies can differ significantly, so work with someone who understands your options, and what will be the best approach for you.
We are standing by to help you with your estate planning and with leaving a legacy for your loved ones.
Provided by Vaal Triangle Insurance
© DotNews. All Rights Reserved.