Andrew Rosen, Contributor
Sept. 22, 2022
While thinking about your own life ending isn’t the most pleasant, it’s necessary when it comes to financial and estate planning. Generally, people fall into one of two categories when dealing with their own legacy planning, much like when dealing with their financial planning – they are either savers or spenders.
The Purpose Of Legacy Planning
Legacy planning is also known as estate planning, and it is the process of planning what happens to your assets upon your death. When conducting legacy planning, you may work with a financial planner , an estate attorney, an accountant or a combination of those professionals to create a plan that suits your goals and financial situation.
The goal of estate planning may vary for you – you may wish to have just enough money left over once you are gone to cover your final expenses. Or, you might want to leave a good deal of money to your children, siblings, a charity, or someone else.
Legacy Planning Spenders
This category of legacy planners are those that want to reach the end of their lives with just enough money in their estate plan to cover their final expenses. They often feel that they have worked hard to build up their assets and want to use it how they see fit within their lifetime.
Those in this category may have children or heirs, but they forgo leaving a financial sum to their children or heirs for a variety of reasons. Perhaps they want their children to work as hard as they did for their money, or they may feel that leaving money to an heir is detriment to their life.
Legacy Planning Savers
For those in this category, they prioritize having something left over to give to someone else when they’re no longer on this earth. They may want to leave behind a legacy for their children, or to pay off college for a niece or nephew. They may scrimp and save during their own lives in order to save as much money as possible to leave to their heirs, or to a charity.
There’s also savers within this group that plan for their heirs by purchasing insurance policies that will pay out upon their death, which will then ensure a financial legacy in their absence. Those that fall into the legacy planning savers generally think that additional money will help whoever they’re leaving behind, instead of being a detriment to their lives. Savers may go to great lengths no only to create legacy plans for their heirs, but to ensure that the funds they leave behind are secured within a trust.
Are You A Saver Or Spender?
When thinking of your own legacy, it’s important to understand which category you may fall into. There’s no right or wrong when it comes to planning for your finances, and how you wish to deal with your estate and legacy. However, it is important to know how you wish to prioritize your assets, particularly towards the end of your life, so that you can create draw down plans and spend your money according to your goals.
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