Legacy planning involves preparing and executing legal and financial strategies to ensure that your assets and values are passed on to future generations according to your wishes.

Legacy planning is essential for high-net-worth individuals (HNWI). It protects wealth across generations, ensures personal and philanthropic values are honored, and reduces the risk of family disputes and legal complications.

But why choose the holidays as the time to bring up your legacy?

Holidays unite families, creating a rare opportunity to engage in deep and meaningful conversations. The season's warmth and reflective nature foster a supportive atmosphere, making it the ideal time to discuss legacy planning in a way that encourages openness and unity.

In this guide to legacy planning, we’ll discuss how you can best prepare for legacy planning conversations with your family, the topics you should consider, and the potential challenges you may face. Let’s dive in.

Preparing for the Conversation

You shouldn’t go into these conversations without preparation. Before you gather the family together, complete these three tasks.

1. Identify Your Goals and Priorities

If you have a strong legacy plan, you likely have a clear idea of your financial goals, but let’s take it a step further.

Consider what financial legacy you want to leave behind. Do you want to support certain family members or fund specific initiatives like education or entrepreneurship? Think about how your wealth can impact future generations.

Don’t forget that legacy planning isn’t just about money; it’s also about how you want to be remembered. What values do you wish to instill in your descendants? These might include generosity, resilience, or the importance of education and charitable giving.

2. Gather Necessary Documents and Information

Before conversing with your family, ensure all your key documents are in order.

1. Wills and Trusts – Make sure they reflect your current wishes and are legally sound.

2. Insurance Policies – Review life insurance, long-term care insurance, and other insurance policies.

3. Investment Accounts and Assets – Compile a comprehensive list of all your assets, from real estate to stocks, so your family understands the scope of your estate.

3. Set the Right Environment for the Discussion

Where you have this conversation matters. Find a quiet, relaxed environment to ensure that family members feel comfortable and can speak openly without distractions. The holidays can be hectic, so pick a time when everyone is calm and free from interruptions to allow for a focused and productive conversation. Time and place matter just as much as your financial documents and priorities.

4 Key Topics to Discuss

Legacy planning is complex and involves many different subject areas. Still, when you have these conversations with your family, you want to discuss four key topics: your estate plan, charitable giving aspirations, business succession plan (if applicable), and your vision for the family.

1. Your Estate Plan

As a high-net-worth individual, your estate plan is critical to your legacy plan. When you discuss your estate plan with your family, you should focus on three areas:

• Will and Trusts: Clarify how you want to distribute your assets and the reasoning behind your decisions to prevent misunderstandings.

• Distribution of Assets and Inheritance: Discuss specific bequests and any conditions attached to inheritances. Address why you've chosen to structure your estate this way.

• Power of Attorney and Healthcare Directives: Explain who you’ve appointed to make financial and healthcare decisions on your behalf if you cannot do so. If you haven’t decided on a family member yet, take this opportunity to see who wants to step up to the plate.

2. Charitable Giving and Philanthropy

What philanthropic goals do you want to leave behind and instill in your family? Share your charitable intentions and the causes that are most meaningful to you. 

There are also ways to structure your giving goals to involve the whole family through vehicles like family foundations or donor-advised funds.

3. Business Succession Plan

If you own a family business, identify potential successors and detail the transition plan to the best of your ability. Perhaps you already have a son or daughter working closely with you at the business, or maybe it’s time to consider a potential successor outside the family. Take this time to clarify the responsibilities of family members within the business to prevent conflicts.

4. Family Values and Vision

What are the values you want your family to uphold? Here are some examples:

• Put family first

• Show respect

• Be proud of who you are

• Prioritize honesty and integrity

Think of it as a family mission statement. Get everyone involved and foster an environment where family members can freely express their thoughts and concerns to build a shared vision for the future.

Addressing Potential Challenges

Legacy planning can be a sensitive topic, so it's essential to approach these conversations with empathy and grace. No one likes to think of a life without you, so be prepared to handle emotional reactions compassionately.

Active listening is critical. Make sure each family member feels their perspective is valued and respected.

Be sure also to consider generational gaps. You might view money, legacy, and values differently than your children. Acknowledge these differences and find ways to connect. Reflect on your family mission statement and look for shared values and objectives that unite everyone and help build consensus around the legacy plan.

Start The Conversation This Holiday Season

Legacy planning ensures your financial, personal, and philanthropic wishes are honored for future generations, but it’s not something you should keep to yourself. Legacy planning should involve the closest people in your life. What better time to get together than the holiday season? The holidays present a perfect opportunity to start these critical discussions in a warm, family-oriented environment.

Taking the first step is always the hardest, but it is essential to start the process. Gather your documents, reflect on your goals, and take the opportunity to begin these meaningful conversations with your loved ones. If you need help structuring your legacy plan to fit your goals and values, a financial advisor can provide expert guidance on creating the right plan. Does this sound like something you’re interested in? Reach out to our team.

Always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any rates of return are historical or hypothetical in nature and are not a guarantee of future returns, which may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions and security positions, when sold, may be worth less or more than their original cost. Specific examples shown are not necessarily representative of the experience of North Ridge Wealth Advisors clients.