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What is Legacy Planning & Why is it Important?


Legacy is a multifaceted word that likely conjures up different reactions depending on who you ask.  The Oxford Dictionary defines it as either:

  1. An amount of money or property left to someone.
  2. The long-lasting impact of particular events, actions, etc. that took place in the past, or of a person’s life.  

It’s much simpler to define and plan for dollar amounts and tangible items to be passed down or donated, but much less straightforward to pass down the intangibles - your values, morals, traditions, heritage, and wisdom.    

That intangible belief system is communicated passively through your living example, made up of interactions, stories, and gestures over time; you may not even realize what influence these may be having on those around you. This type of legacy may be just as important as the monetary kind, as it works to strengthen the relationship inheritors have with the wealth. This type of legacy is also more at risk of being lost over time, as inheriting generations become further removed from the wealth creation story.  

Let’s use a simple, hypothetical example of how lack of communication around legacy could play out: 


Betty and David created a Family Trust for the benefit of their children and further descendants when they sold their business and their children were still young. Even after their windfall, they lived a modest lifestyle, as that was what they were accustomed to. Their youngest daughter, Jane, pursued a high paying career. However, she worked long hours away from her family and wasn’t passionate about her work.  

Her parents had shown that they valued living below their means and she believed that was expected of her as well. If she had had a better understanding of her parents wish for her to be able to live with enough financial freedom to be able to pursue something she was passionate about without having to prioritize earning income to support her family, she likely would have chosen a different career path. This may have afforded her more time with her family, which is something her parent’s would have fully supported.

Jane’s son, Nick, knew his grandparents were wealthy and assumed he’d be inheriting some of the money. His entitlement caused him to become complacent personally and professionally. He has made no attempt to find work or contribute to society. Betty and David weren’t intending for the wealth to be a disincentive for their descendants to be self-sufficient, but that’s just what happened in this case due to lack of communication and transparency regarding their wishes of how the wealth should be passed down.

To formalize passing down your intangible legacy to future inheritors and to help everyone involved understand your beliefs, there are a couple of tools we think are worth exploring:


1. Ethical Will – 

A non-binding personal message in the form of a statement or letter to beneficiaries that express intentions, values, perspective, and history, and hopes for future generations.

2. Trustee Guidelines –

A non-binding letter to Trustees expressing your vision and thinking around the use of Trust assets and under what circumstances they would want Trustees to make distributions to beneficiaries or not. 

The below Trustee Guidance & Ethical Will Prompts will help you think through your value system and articulate your intangible legacy to inheritors and Trustees. We encourage you to discuss this belief system with your trustee and children. At Lake Street Advisors, we specialize in working alongside your estate planning attorney to help navigate passing down both your monetary and intangible legacy to future generations.  

If you would like to discuss how to implement legacy planning into your estate plan, please don't hesitate to reach out to speak with one of our experienced advisors.


Download Now: Trustee Guidance & Ethical Will Prompts

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