In many instances, estate planning is about providing for your loved one’s immediate needs. But if you want your wealth and your assets to have long-term implications for your family, your loved ones, and causes that you care about, then you’ll need to approach your estate plan differently. But that can be confusing to figure out if you’re unfamiliar with the estate planning process, which is why this week we want to take a closer look at what you can do to ensure the long-term viability of your wealth.
How to use your estate plan to ensure the longevity of your wealth
Given the detail that can go into an estate plan, you can tailor yours to suit your needs. Therefore, if estate longevity is important to you, then you might want to do the following:
- Consider heirs carefully: Not all heirs are created equal. You might choose someone to inherit a large portion of your estate out of love, but that individual might not have the skills necessary to appropriately manage that wealth. This puts those assets at risk of being misused and squandered. You can prevent this from happening, though, by being more thoughtful about to whom you leave your assets and how those assets will be accessible. For example, you can use an incentive trust to ensure that your loved one meets an identified goal before assets are fully released to them.
- Restrict the flow of wealth: You don’t have to give your loved ones a large sum of money to adequately support them. In fact, this can be bad for them if they don’t have strong money management skills. You can help them here by using something like a spendthrift trust or a discretionary trust, which will slow the disbursement of the estate’s wealth so that your loved one is supported while the estate’s assets are made to last longer.
- Focus on your grandchildren: Another way to extend the reach of your estate is to skip an entire generation in your asset distribution scheme. You can use a generation skipping trust or include your grandchildren in your will to do this. Some of your estate planning options here will give you tax benefits, too. It might be helpful to discuss your intent with your family members if you go this route, though. After all, completely skipping over your children, which isn’t required to provide for you grandchildren, can come as quite a surprise to your children.
- Give to charity: You might be able to solidify your legacy by giving to a charitable cause that’s important to you. There are various ways to structure this giving, which in turn allows you to provide long-term support to the organization or mission that you care about. As a result, this path might give you additional mileage out of your estate plan.
Put your mind at ease with a strong estate plan
You have a lot to think about when you start the estate planning process. But don’t let the wide variety of planning options and tools at your disposal give you cold feet. You can easily understand what the process entails and what it can do for you. You just have to have the time and willingness needed to educate yourself.
While that might sound challenging in today’s age where time is a precious commodity, we think that you’ll feel a sense of relief once your wishes for the future are solidified in your estate plan. With that in mind, why not start the process for your estate plan now to give yourself and your loved ones the peace and comfort that you want?