The desire to leave a legacy may be the height of altruism, for it is a gift to the future; you may never witness the benefits of it nor feel the appreciation of others.
Creating your legacy does not happen overnight, and it doesn’t come without a strategy and hard work.
Create Your Vision
You should have an end in mind before you begin. Start by reflecting on what you value and care most about. Consider your passions and the unique skills you have. Your career and hobbies are good places to start. Be sure to ask your friends and family to weigh in. They may offer insights you don’t see about yourself.
Determine Your Legacy
Think about the legacy you wish to leave and the impact you want to make. A legacy can come in many colors. It can be financial, institutional, instructional or wish fulfillment, or the passing on of values and life lessons.
Develop a Strategy
A legacy will not happen without a blueprint and the persistent pursuit of your objective. A strategy can help you organize your efforts and keep you on the path that leads to success.
Live Your Legacy
A legacy is not only what you leave behind, but the impact you make on others while alive. Be sure to live your values with your family, at work, and in your community. Nothing is more likely to survive you than your impact on the lives you touch today.
Contact CapSouth Wealth Management to dicuss your legacy. Visit our website at www.CapSouthWM.com or call 800.929.1001.
Goodreads, 2016
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with CapSouth Wealth Management. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.
CapSouth Partners, Inc., dba CapSouth Wealth Management, is an independent Registered Investment Advisory firm. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences.
You’ve invested your life
into caring for your family’s wellbeing. You cherish them and want them to
mature into smart, healthy, successful adults. Naturally, as they become adults
and grow older, your authority over them recedes. They make their own
decisions, and you just hope it’s for the best.
Your feelings don’t change.
They are your children. And they’ll always be your children. The same goes for
your closest, most intimate friends. You want their futures to be safe and
secure; you want them to prosper in life. And what better way to show your
devotion and appreciation than by ensuring your hard-earned money and
investments go to them—after your passing?
In other words, how do you
keep your money in your family or within your circle of closest friends?
Estate planning is the key. Why is planning your estate so important?[i]
You avoid probate court. In many states, probate
fees can reach 5% of the value of the estate. For an estate valued at $400,000,
legal fees may reach $20,000.[ii]
Planning your estate will lessen the tax burden
on your heirs. If you die without a will, the laws of your state, not you,
govern how your estate is distributed. However, inheritance laws generally
favor spouses, domestic partners, and blood relatives. But why leave it to the
legal system to decide?[iii]
Many people who are beginning to plan their
estates seek professional financial advice following the loss of a loved one or
a close friend. While wise, the timing may be off. The best time to start
estate planning is immediately—to avoid potential worst-case scenarios, such as
mental decline or sudden death of a spouse or loved one.
Comprehensive estate planning, ironically, helps
protect beneficiaries, both adult and children. With adults, a plan helps guard
against bad financial decisions later or potential credit problems. With children,
it designates guardians or conservators to protect minors’ financial interests.[iv]
A solid estate plan with asset protection
provisions may help shield your assets from potential creditors.[v]
You’re planning to enjoy
many more years with your family and friends. What can you do now to ensure
your money goes to loved ones—as opposed to Uncle Sam?
Here are 5 ways to maximize
your family money in the here and now:[vi]
You can
spend your money and your assets, which will ultimately reduce your tax burden
and benefit your family. Obviously, your first priority is to your loved ones,
not to bolstering government coffers. The problem, however, is that you may
live a good, long life, and your goal is to ensure you don’t outlive your
wealth. This option is worthwhile if you have plenty of cash reserves and a
robust estate.
Gifts
pose the same challenge if your estate and your assets have the potential for a
long-shelf life. While giving to family and friends is noble, the IRS
establishes restrictions on giving levels. You may give up to $15,000 each to
individuals or charities before having to file gift tax returns. The maximum
lifetime gift tax exemption is $11.18 million.[vii]
You may
lend to family members and friends. However, to stay IRS compliant, you should
draft a loan note that includes the loan amount, payback date, interest rate,
and any collateral or security. This enables you to avoid the IRS’s gift
classification.[viii]
You may
pay wages to your family; 4 in 5 older Americans suffer from at least 1 chronic
disease and may need care.[ix]
By 2030, more than 1 in 5 Americans will be over the age of 65.[x]
The IRS allows for the paying of wages to family members, which helps build
their Social Security earnings record.[xi]
Services may include providing home health care or performing other household
or small business-related work.
You can
create a life estate deed, which transfers the family’s house to a child while
the parents retain the right to live in the house. Following the death of the
parents, children don’t have to go through lengthy probate proceedings. The
home transfers to children—beneficiaries or remaindermen—as a gift.[xii]
A life estate deed may also remove the home from consideration as a personal
asset when applying for Medicaid assistance for long-term care needs.[xiii]
Seek guidance from a
financial professional to learn more about your rights and opportunities to
provide for your family—even in future generations.
Contact CapSouth at 800.929.1001 or visit our website at www.capsouthwm.com to learn more about CapSouth or to speak with an advisor about estate planning.
Investment
advisory services are offered through CapSouth Partners, Inc., dba CapSouth
Wealth Management, an independent registered Investment Advisory firm.
Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness
of the information. This material has
been prepared for planning purposes only and is not intended as specific tax or
legal advice. Tax and legal laws are
often complex and frequently change.
Please consult your tax or legal advisor to discuss your specific
situation before making any decisions that may have tax or legal consequences.
This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.
CapSouth Partners, Inc., dba CapSouth Wealth Management, is an independent Registered Investment Advisory firm. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences.
For many people, retirement income may come from a variety of sources. Here’s a quick review of six primary sources:
Social Security
Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker’s 35 highest earning years. (If there are fewer than 35 years of earnings, non-earning years may be counted in the calculation.) In mid-2018, the average monthly benefit was $1,413.[i],[ii]
Personal Savings and Investments
These resources can also provide income during retirement. Depending on your risk tolerance, time horizon and goals, you may want investments that offer steady monthly income over vehicles giving you the potential for double-digit returns. A quick chat with a financial professional can help you understand your risk tolerance as you approach retirement.
Individual Retirement Accounts
Traditional IRAs have been around since 1974. Contributions you make to a traditional IRA are commonly deductible. Distributions from a traditional IRA are taxed as ordinary income, and if taken before age 59½, may be subject to a federal income tax penalty. Once you reach age 70½, these accounts require mandatory withdrawals.[iii]
Roth IRAs were created in 1997. Contributions you make to a Roth IRA are non-deductible, as they are made using money that has already been taxed. Sometimes, only partial Roth IRA contributions can be made by taxpayers with six-figure incomes; some especially high-earning individuals and couples cannot direct money into Roth IRAs at all. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Roth IRAs do not have any required minimum distribution rules.3
Defined Contribution Plans
Many workers are eligible to participate in a defined-contribution plan such as a 401(k), 403(b), or 457 plan. Eligible workers can set aside a portion of their pre-tax income into an account, and the invested assets may accumulate with taxes deferred, year after year. Generally, once you reach age 70½, you must begin taking required minimum distributions from these workplace plans.[iv] Some plans may also include an option to contribute after tax income.
Defined Benefit Plans
Defined benefit plans are “traditional” pensions – employer-sponsored plans under which benefits, rather than contributions, are defined. Benefits are normally based on specific factors, such as salary history and duration of employment. Relatively few employers offer these kinds of plans today.[v]
Continued Employment
In a recent survey, 68% of workers stated that they planned to keep working in retirement. In contrast, only 26% of retirees reported that continued employment was a major or minor source of retirement income. Many retirees choose to continue working as a way to stay active and socially engaged. Choosing to work during retirement, however, is a personal decision that should be made after considering your finances and personal goals.[vi]
Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. This material has been prepared for planning purposes only and is not intended as specific tax or legal advice. Tax and legal laws are often complex and frequently change. Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.
This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.
