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A Legacy That Lives On Long After You Are Gone

Three Strategies to Disinherit Uncle Sam and Create Enduring Legacies for Those You Love

Mistakes made in the estate planning process while you are alive can result in devastating results for those you love long after you are gone. Consider the estate of Marilyn Monroe. When she passed away in 1962 she left the lucrative licensing and royalty rights of her image to her acting coach, Lee Strasberg. All these years later, those royalties generate millions of dollars in annual revenue and those millions are going to a woman who Marilyn never met … Lee Strasberg’s widow to whom he left everything when he died in 1982. Then there is the estate of Elvis Presley. He may have been the King of Rock and Roll, but he sure did not have an estate plan worthy of royalty. When he died in 1977, his estate was valued at $10 million. After probate costs, legal fees, and estate taxes, a remarkable 73% of the estate’s value had vanished, leaving his heirs with $3 million. And then there is the Duke, John Wayne, who although he died of cancer in 1979, his heirs are still fighting in court over his estate. Unfortunately, these problems are not confined just to celebrities. Poor estate planning can greatly diminish a lifetime of wealth accumulation and create family splits that may never heal.

Protect Spendthrift Heirs From Themselves

The first common mistake is to not plan for the problem of spendthrift heirs. It is a just a fact of human nature that we tend to not value that which we did not work for. The reason you are not spending your money foolishly is you know full well the hard work and sacrifice it took you to accumulate it. The reason your children may spend the money very quickly is that for them it will feel like “found money.” One study found that on average in the United States it takes an heir just 17 months to spend 100% of their inheritance. Think about that … 40 years to accumulate it and just 17 months before it is gone.

Disinherit Uncle Sam

The second common estate planning mistake is to ignore the impact of taxes. You know, our founding fathers had a rallying cry of no taxation without representation. Well, with all of the taxes we have at death these days, if they were alive today I suspect the founding fathers would have to amend their motto to “No taxation without respiration.” Estate taxes on larger estates can eat up to as much as nearly 45% of the value of an estate, and income taxes on IRAs and 401(k)s (which had never been taxed) can clip as much as another 35% in taxes. Cumulatively, that can be as much as 80% of all that you took a lifetime to accumulate. There are estate and income tax reduction strategies that it are very important that we should talk about and explore together. Uncle Sam should not be your biggest heir.

Create a Values-Based Legacy That Will Live On Long After You Are Gone

The third common estate planning mistake is to ignore the emotional aspect of estate planning. When you pass away, there will be a hole created in the lives of your loved ones that will never be filled, but you can take steps now to make that grief easier for them to bear. I have written a short workbook called “An Enduring Legacy.” It is designed to pick up where your legal documents leave off. It is a tool for you to tell the story of your life and the memories and values you hold dear. It helps you to document your feelings for those you love and to communicate those things that you have held closest to your heart. It will be a document that your children will go to time and time again long after your will has been relegated to a filing cabinet. Call my office at (304) 346-7782 or (800) 361-1792 and I will be happy to send you a complimentary copy. Perhaps we should talk. You took a lifetime to accumulate your legacy. It is important to take the time now to protect it.

Next Steps

Sometimes a fresh set of eyes and an independent voice can help you to determine if you are on the right track or if changes are called for. Perhaps it is time that you asked for a second opinion when it comes to your financial health. Call our office at (304) 346-7782 or (800) 361-1792 and arrange a time to talk with Shawn Moran, either in person or on the phone. You’ll be glad that you did.