Ensuring Your Legacy

Ensuring Your Legacy: Key Considerations for Estate Planning During Your Lifetime

Navigating the journey of life, one accumulates more than tangible assets; we also amass invaluable memories and experiences that comprise our enduring legacy. The true challenge lies in ensuring that this inheritance, both material and sentimental, is seamlessly transferred.
Through precise planning and expert guidance, legacies can be safeguarded and live on from generation to generation. The below points can get one started in their legacy transfer plans, but a much more thorough exercise should be done with the assistance of your Rockefeller Private Advisor, as well as the Rockefeller Estate Administration Planning Guide.

1. Assign Roles

The estate planning process can be overwhelming to any individual thinking about legacy transfer. An advisable first step is to decide on the executor of your estate, its beneficiaries, as well as trustees if appropriate. While this list may change over time based on life events, establishing relevant stakeholders in your legacy transition can set its foundation. In addition to these roles, one might consider consulting with hired professionals such as an attorney, accountant, and Private Advisor for expert guidance.
It is crucial to also make clear your wishes for succession planning. Alongside the transition of wealth and assets, decide who will take control of any businesses under your purview. However, this will not be a simple turnkey solution. Think critically about who within your family or outside of it will carry on your business’ legacy and the necessary steps to guarantee they are prepared to do so.
The sooner these roles are established, the better. Giving your will’s executor a clear plan will result in a more efficient and accurate transfer of assets and fulfillment of your wishes.

2. Establishing a Will and Revocable Trust

The bedrock of any effective estate plan begins with a comprehensive will or a simple will used in conjunction with a Revocable Trust. Before writing a will, be sure to note the residential jurisdiction, as federal, state, and local laws can vary and are often subject to differing interpretations. While these differences can be minor, taking note of them before putting pen to paper could save time and frustration. While an individual can write their own will – or lack one altogether- this could create potential pitfalls and is not recommended. It is advisable to consult with an expert.
A common strategy to protect one’s legacy is establishing a trust. Understand that there are revocable living trusts and irrevocable trusts, in which the former essentially acts as a Will substitute to avoid probate and provide privacy to the decedent’s estate plan and allows the trust’s grantor (creator) to make decisions relating to the trust while living. Once a revocable living trust’s grantor passes, the trust becomes irrevocable and generally cannot be altered.
Irrevocable trusts are an effective way to protect wealth, as they can own the following assets: individual stocks and bonds, real estate, bank and investment accounts, artwork, and even copyrights. Note that vehicles like an IRA or 401(k) plan cannot be placed in a trust during the account owner’s lifetime, but certain trusts can be named as the beneficiary of these plans after the account owner’s passing. Consider the following commonly leveraged irrevocable trusts: a charitable lead trust, irrevocable life insurance trust, spousal lifetime access trust, grantor-retained annuity trust, or an intentionally defective grantor trust. Keep in mind you will need to assign a trustee who manages the trust and assumes legal title of the assets owned by the trust.
While this litany of options can be overwhelming, a Private Advisor will be able to parse through and recommend the best course of action for you and your family.

3. Gifting and Philanthropy

In addition to and/or in conjunction with the use of irrevocable trusts, families should make sure they are leveraging an effective strategy regarding gifting, in conformance with the lifetime federal gift and estate tax exemption.
Be mindful that gifts count against one’s estate tax exemption amount, which is $13.61 million per person for 2024. So, if an individual gave away $3.61 million worth of gifts during their lifetime and dies in 2024, the first $10 million of their estate would not be subject to estate tax. Notably, however, the first $18,000 of gifts (in 2024) to an individual each year will not utilize any of a donor’s $13.61MM gift and estate tax exemption. This annual gift tax exclusion amount can be given to an unlimited number of individuals without utilizing any gift and estate tax exemption.
Part of one’s legacy can go beyond assets and business to include a positive impact through philanthropy. Think about causes that you are passionate about and the organizations that support them. Leveraging vehicles such as a charitable remainder trust, charitable lead trust, or private foundation can be an effective way to put your purpose into action. Rockefeller’s Philanthropic Advisory guides individuals looking to establish a charitable legacy for themselves and their families.

Final Thoughts

Preserving and passing on one’s legacy through estate planning can be one of the most important steps of our later years. It ensures a lifetime of hard work and values is used to guide and enrich future generations and the causes we are passionate about.

Speak to a Rockefeller Private Advisor to learn more about preparing for your legacy transfer and read the entirety of our Life Transitions series for more insights.