Leave A Financial Legacy To Set Your Loved Ones Up For Life

As we age, it’s only natural to start thinking about how we would like to leave our legacy. Luis Carlos De Noronha Cabral Da Camara, a wealthy Portuguese aristocrat, left his entire fortune to seventy strangers he found in a Lisbon phone book.

Jack Benny, the popular comedian, used a portion of his wealth to deliver his wife a long-stemmed rose every day for the rest of her life. How will you create your legacy?

If you’re looking to leave a financial legacy for your family, friends, and charities you’re passionate about, read on to discover five ways you can leave a lasting legacy. 

1. Life Insurance

Whole Life Insurance is an easy way to leave a lasting legacy for your loved-ones.

Not only does whole life provide you with lifetime protection (as long as premiums are paid), the death benefit given to beneficiaries after you pass-away is income tax-free, making life insurance an efficient way to pass money to loved-ones.

Another benefit of a whole life insurance policy is that it builds cash value tax-deferred that can borrow from if needed.  But keep in mind, if you borrow from the cash value, you will be required to pay a loan interest on an annual basis for as long as the loan is outstanding. Any outstanding loans, and accrued interest, will be deducted from the policy proceeds at the insured’s death; the balance will be paid to the beneficiary.

2. Vacation Home

Investing in real estate like a vacation home can have significant dividends when trying to create a legacy for your family, friends, and charitable causes. While vacation homes can come with a sentimental attachment, it can also leave a legacy for the family. 

One way to utilize a vacation home as part of your legacy is to set up a family limited partnership or a trust to make for a smoother process to transfer interest in the property. 

Due to the sentimental attachment of vacation homes, it’s important to plan a structure, so all beneficiaries feel valued and keep the process of sharing the property intact. 

Using a family limited partnership offers tax breaks and makes it easier to transfer ownership between siblings should the need arise. 

3. Establish a Will 

Sometimes it can be difficult to share family heirlooms or to divvy up personal and valuable assets. In your will, you must make clear how the home and family items are to be divided.

It may be necessary to create a list establishing who is receiving important items. Therefore it’s essential that proper estate planning is done to ensure a smooth process. The clearer you can make your instructions, the better. 

Leaving a list makes it easier for family members to accept how to divide personal and valuable assets left in the will. Perhaps the family home can be divided equally upon the sale of the house.

If the children are still young, a trust can be set up to be given once the beneficiary reaches a certain age. 

4. Beneficiary IRAs

Another great way to leave your children or grandchildren a financial legacy is to name them on a traditional retirement account (IRA) or a Roth IRA. There are pros and cons to both. 

Traditional IRAs are tax-deferred, meaning taxes aren’t taken out until the IRA is withdrawn. While this may be good for building compound interest, taxes can take quite a bite out of your beneficiaries’ inheritance. If that isn’t something you want your beneficiary to deal with, you may want to opt for a Roth IRA. 

A Roth IRA isn’t tax-deferred, meaning taxes are taken out with every deposit. However, when it comes time for your beneficiary to actualize their inheritance, they don’t have to worry about taxes. The compound interest isn’t lost with a Roth IRA, potentially leaving more in your beneficiaries’ pocket.

An IRA can be set up with multiple beneficiaries. When needed, the overall IRA will be split between each beneficiary and may be withdrawn independently. That allows each beneficiary to make a decision of whether they would like to let it mature, or if they would like to withdraw the account for their share of the IRA. 

5. Annuities

Similar to beneficiary IRAs is annuities. A donor can create an annuity in the name of a beneficiary. While IRAs would provide a lump sum for a beneficiary, an annuity can provide a lump sum payment or an income stream for the beneficiary for the rest of their life. 

The younger the beneficiary is the greater benefit. This can leave a legacy that lasts a lifetime. While this can sound ideal as a way to create your legacy, it’s important to also understand the pros and cons of annuities before going ahead with this type of investment. 

Create Your Legacy With Vantis Life

If you’re thinking about ways to create your legacy for your family, don’t wait. Time is a valuable commodity, and the sooner you start, the better.


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