This is a conversation that has come up for me a few times in the last few months with people, and it has really gotten me thinking. Everyone leaves a legacy, whether they intend to or not, but what kind of legacy do you want to leave??
Dictionary.com defines a legacy as:
- Law. A gift of property , especially personal property, as money, by will; a bequest
- Anything handed down from the past, as from an ancestor or predecessor.
I think that it is especially important to acknowledge that a legacy is not just about money.
I see lots of grandparents at my son’s sports games, cheering on their grandkids. This is a legacy – of love. I know of a couple of people who are recording their family histories for their children and grandchildren, and making up comprehensive family trees. This is another legacy – the legacy of where you have come from and who you belong to.
Some people that I know are contributing, through their work, to the knowledge base of their field of expertise and mentoring others to take over when they move on. This is the legacy of excellence – of making the world a better place for all.
Photos are an important legacy as well – make sure that you get a decent (professional) family photo taken regularly. Not everyone gets a warning that they need to get their affairs in order.
From a financial perspective, there is often a desire to make a financial contribution but a fear that it will not fulfil its purpose.
A couple of suggestions in this regard are:
If you want to leave your grandchildren money to be used for the deposit for their first home, pay it (or have your estate trustees pay it) into their KiwiSaver account. They should be able to access it for the first home buyer’s subsidy and if not, it will be used to provide for their retirement.
Here is a recent article in the NZ Herald about doing this.
Another option to consider is making lump sum payments onto your children’s or grandchildren’s student loans. As an incentive, you could arrange to match their lump sum payments dollar for dollar, encouraging them to save and demonstrating the importance of repaying debt.
You could buy (or give) your children or grandchildren something durable and something that they relate with to keep as a memory. A client is buying his grandsons limited edition rugby memorabilia to keep, as they are rugby mad. Another client has bought her daughters a really valuable piece of jewellery each, with a view that it will be passed down to the next generation. It is quite possible that these items will also appreciate in value through the years.
You can also arrange to leave a financial gift through your estate to a cause or charity that you believe in, and you certainly can contribute to this while you are alive as well.
As we approach the start of a new year, it is worth exploring what kind of legacy you wish to leave and making some purposeful plans to ensure that your legacy is fulfilled.