Legacy planning isn’t often the most fun or exciting task. But it’s a necessary one, that deserves dedicated time and energy. That’s because creating a legacy that reflects one’s values when they were alive is incredibly meaningful. It’s possible to build a lasting legacy regardless of financial status — here are 6 creative ways to do it.
Set Up Investments for Loved Ones
Many people think about legacy as what’s left behind in a will. But a legacy doesn’t need to wait until after someone is gone. For example, starting a college savings fund or opening a taxable brokerage account for a child or grandchild will keep the creator’s memory alive long after they’re gone.
Plus, investments that are created now will also have time to grow. That means a few thousand dollars in a brokerage account for a newborn can turn into a small fortune if invested properly throughout their lifetime.
Pass Down a Business
If someone has a family business or plans to turn a hobby into a business, that’s a great thing to turn over to future generations. Not only does it provide the value of the actual business, but employment opportunities for children and grandchildren. And if the business holds sentimental value to the family, it could become a community staple for years to come.
Leverage Life Insurance
Putting an appropriate life insurance policy in place can protect loved ones if the policyholder passes away prematurely. And while term life insurance is typically used for temporary protection, a legacy can be built by maintaining permanent life insurance policy such as whole life insurance or universal life insurance.
Permanent life insurance policies offer a death benefit that will pay out someday as long as the policy remains in place. In addition, whole life and universal life insurance accumulate cash value, which can be accessed at any time throughout one’s life.
Teach Children About Money
Children are often the most impactful legacy people leave behind. It makes sense that financially savvy children are more likely to carry a legacy into the future. For this reason, it’s important to teach them about personal finance.
The lessons children learn can be as simple as the power of compound interest and how to assess wants and needs. It’s important to recognize that any tidbits of knowledge given to future generations will directly reflect the teacher and help create a lasting legacy.
Leave Gifts to Charity
Many people view their legacy not just in terms of supporting loved ones but also causes they held close during their lives. So if a charitable organization is especially precious, it’s possible to pass a piece of an estate to said charity. That might mean leaving a cash donation, an investment account, or setting a charity as the beneficiary to a life insurance policy.
Live the Legacy Now
Legacies don’t need to wait until someone is gone. By modeling good habits now, it’s possible to live a bountiful legacy every day. Younger generations need positive role models to show them the types of behaviors worth adopting. Living well now can go a long way to impacting the lives of others in the future.
The Bottom Line
There are so many ways to build a lasting financial legacy, and it doesn’t take a lot of money to do it. Think about options like setting up investment accounts, passing down a business, using life insurance as a tool, teaching children about money, and making charitable donations. Of course, it’s also critical to live the desired legacy every day. And if someone is uncertain what that legacy looks like, working with a financial planner can help find the right direction.
All investments carry some level of risk including the potential loss of all money invested. No investment strategy can guarantee a profit or protect against a loss.