How to Give Heirs What They Most Want (It Won’t Cost Much)

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An enduring legacy of the financial crisis has been a clear shift in personal values—away from materialism and toward relationships and experiences. Born out of need, this national (if not global) rethinking of what is most important has had remarkable staying power even as the economy has started to improve.

The latest bit of evidence comes from an Allianz Life survey, where 86% of boomers named “family stories” as the most important part of their legacy—ahead of possessions and inheritance. It appears that we care more about passing down our values and traditions than the contents of our Roth IRAs. Indeed, some 75% of boomers say it is not their duty to leave a financial legacy.

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That may be because boomers do not expect to have much of a nest egg to pass down–or that they believe they have lived such fabulous lives it would be a shame to go unremembered. But boomers also say they are not counting on an inheritance from their parents. Fewer than 5% say leaving money behind is their parents’ duty. This thinking has prompted Allianz to elevate “family stories” in the planning process, naming it as one of four pillars in a well-rounded legacy. The pillars:

  • Values and life lessons, including family stories
  • Instructions and wishes, including health directives and funeral arrangements
  • Personal possessions of emotional value, including pictures, scrapbooks and furniture
  • Financial assets, including real estate

All four pillars require thought. But it’s a relatively straightforward proposition to, say, direct that you be cremated and that all financial assets be divided evenly. Deciding who gets grandma’s rocker and your silverware is a little tougher. But a simple family discussion should make it pretty clear who wants what the most.

Family stories are different—yet of utmost importance. The philosopher Abraham Maslow said, “The ultimate disease of our time is valuelessness.” Poll results show that boomers agree. But how do you pass on something so intangible as a value?

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It boils down to having open family discussions and being true to your ideals. Dr. R. Kelly Crace at Duke University has said, “If I followed you around for three weeks I could tell you exactly what your top five values are.” It is not what we say we care about but rather what we do that informs others about our values. According to a GenSpring Family Offices blog:

“Our core values are revealed not just through the philanthropic passions we pursue, but in how we treat others, and in the time and devotion we give to our family. They are shown in the generosity of spirit we show to friends, family, employees, and service providers, and by the priorities we make clear to others.”

According to Allianz:

“Values are some of the most meaningful gifts we get from our parents and other family members. And one of the most effective ways to ensure these values and life lessons are preserved is to record them. Ask each other to write down the values and lessons they consider to be most important. Then suggest that everyone participate in the memorable task of assembling symbols of those values and lessons. Create photo albums and scrapbooks. Build a video library. Some of your family members may have written poems, stories, or heartfelt letters; such mementos are worth cataloging and even framing.”

To get started thinking about what values are most important to you, ask questions like:

  • Is there a specific lesson or teaching I want remembered?
  • Is there a charity or cause I want my kids to remember?
  • Do I recall religious stories or events that have had an impact on my life?
  • Do I have specific religious items I’d like to be kept in the family?
  • What family history would I like future generations to remember?
  • Are there specific traditions in my family around holidays and life events?
  • Do I have annual family trips, reunions, or gatherings?

These are just a start. It takes reflection to understand what is most important in your life and how you might get that message to heirs. But it won’t be a waste of time. Sometimes a scrapbook is worth more than an investment portfolio.

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ThomasPullen
ThomasPullen

Financial companies like GenSpring or BigSur Partners (http://www.bigsurpartners.com) seem to be doing alright even in today's economy,  and these companies are mainly in the business of managing wealth, so surely not every wealthy patriarch is only interested in passing on only their values to their children. "Family stories" may be important, but providing for your loved ones hasn't entirely gone out of fashion. The 75% of boomers "say" it's not their duty to leave a legacy. But I wonder if there isn't a disparity between what people say, and what they actually do.