How to Maximize Your Legacy and Estate Plan in 5 Easy Steps

Some may think that legacy and estate planning are the same, but you’ll soon see they are not the same. 

A legacy is something transmitted by or received from an ancestor or predecessor or from the past.

Whereas an estate plan is an arrangement for the disposition and management of one's estate at death, sickness, or incapacity through the use of wills, trusts, insurance policies, and other devices.

The key difference is an arrangement versus something transmitted.

If you want to maximize your “something transmitted,” you’ll need to make proper “arrangements,” i.e., your estate plan. 

Let’s begin by understanding where you are now and your net worth. 

Step 1: Understanding: Your Net Worth

Planning for the future is not a complex process, and many will use scare tactics to express that it is. It may feel difficult, but everything begins with mini-steps. The more baby steps you take to plan for your future, the more prepared you will be for what may come.

What you have accomplished thus far is essential to know how much of your net worth you own to plan for the future.

Understanding your net worth will help map out your future planning and other decisions you make in life.

The earlier you start to understand your net worth, the easier it is to maximize your legacy and estate plan.

Remember baby steps, next, step 2

Step 2: Create: Your List

Now that we understand why your net worth is essential let’s create a list. Inventory is a crucial aspect of estate planning, and this will help you prioritize what you need to do to protect your legacy and estate plan.

Create a list of assets and debts. You can begin listing assets like houses, cars, investments, and savings accounts. Liabilities are debts that need to be paid back with interest. Create two columns for assets and debts.  Make that list, then move to step 3.

Step 3: Calculate: Your Net Worth

You know the importance of understanding your net worth, made your list, and now it is time to calculate.  The fun part–net worth is calculated by subtracting liabilities from assets.

Once you have your net worth, here are some questions to consider. Is there anything you would like to change? Is where you want your family to be?

If you want to make sure that your family is taken care of in the future, it’s important to know what they need from you today to plan for the future.

Step 4: Prepare: An Estate Plan

An estate plan is a set of legal documents and arrangements that help us prepare for the distribution of assets after death, sickness, or incapacity. It can be complex and overwhelming, but it doesn’t have to be. Many tools, resources, and professionals are available to help you make these decisions.

You can prepare by writing down your wishes, ensuring you have a will and trust, and making sure you are ready for any emergency.

Once you note your wishes, then move on to the final step.

Step 5. Communication: Discuss with Family Members

If the opportunity presents itself, you may want to discuss your legacy and estate plans with your family. Besides leaving a set of instructions for how you want your assets distributed, you have the chance to discuss your values and ideals. 

The verbal legacy can significantly impact your loved ones, and the written legacy can give them a roadmap to follow. You can also consider leaving your favorite books, music, or other media to your family so they will remember you personally. You may want to leave behind a favorite piece of clothing or the jewelry you’ve made for yourself or someone special in your life. A heartfelt note is another way to communicate your desires.