“Sometimes the poorest man leaves his children the richest inheritance.” – Ruth E Renkel
Growing up I was always told that I was going to college, it wasn’t up for debate. Even though I was the first to finish college in my immediate family, there was no pressure, just a sense of purpose whenever the topic came up. Getting my degree was just part of the plan and I set a course to complete that task. One day I asked my Dad, “Why it was so important to go to college?” He simply said, “They can take all your have but they can never take your education.” That discussion deposited my family’s value of education in me and the pursuit of knowledge led me and my wife to start graduate school together. How important the values and beliefs deposited in us can also pass down to our children. This is truly our legacy.
Time magazine recently estimated that 70% of an inheritance is spent completely within the 2nd generation. So, if you have a goal to leave a family fortune, chances are your children will be the only primary beneficiaries. At the same time, CNBC reported last year that 68% of millennials expect an inheritance, yet only 40% of their parents will actually leave one. There is an old Hebrew proverb “A good person leaves an inheritance for his children’s children.” I am not advocating saving all you have, nor am I advocating spending all that you have. What we really need to recognize is the need to not only leave an inheritance but also to train the next generation to steward wisely what they have been given.
Estate Planning vs Legacy Planning
Estate planning is not to be overlooked, having the right documents ensures the process to transfer your estate is simplified and that your wishes are carried out. Legacy planning is not in contrast to your estate plan, just a process of passing down your beliefs and values that are timeless and can never be taken away from the recipient.
I recently attended the funeral for a friend that was 84 years old. Knowing him, he had all the proper estate planning documents in place. Yet during the funeral, I saw the legacy of a man that put the importance of taking the time to instill in his family and friends what was important to him. It was one of the most encouraging eulogies I have ever heard, as so many people shared similar stories of this good man. He had given them something that did not cost him a dime to share but is a priceless asset to those he left behind.
It sparked a thought-provoking discussion with me and my wife. It is not who we want to speak at our funeral but what we want them to say. What is your legacy?
Clint Snead, CFA