What is the Difference Between Estate Planning and Legacy Planning?
A commonly held belief is that estate planning and legacy planning are one and the same. Alternatively, some may incorrectly assume that you may only use one and not the other. However, this is not the case. Both legacy planning and estate planning are geared toward making future arrangements in the event of one’s incapacitation or death. A legacy plan and estate plan can work in conjunction to help satisfy your end-of-life needs or secure your preferences if you become incapacitated. You will find that making a distinction between the two can help to simplify your future plans.
Estate planning refers to the process of creating documents that are put in place to protect asset distribution and final wishes. This includes (but is not limited to) the following:
- Last Will and Testament
- Power of Attorney
- Advance Directive
- Revocable and Irrevocable Trusts
As a general concept, estate planning is centered on asset distribution as well as document creation. While creating an estate plan, one must account for all of their assets and make formal arrangements for their distribution. A well-crafted estate can be seen as a vehicle for your legacy plan to be put into place.
Legacy planning allows one to attach a personal purpose to their estate planning documents. For example, one can make use of legacy planning to ensure the needs of their family (such as education, childcare, and pet care) are handled, even if they have passed away. One can also prioritize charitable giving and business succession via a legacy plan. In this sense, a legacy plan allows one to infuse their future plan with their values and morals.
This type of plan often involves making arrangements for generational and family-related concerns, but one does not need to have familial beneficiaries or family members to have a legacy plan. It is helpful to remember that this process revolves around your unique circumstances and choices. There is no one-size-fits-all legacy plan.
When and How Do I Begin?
Any legal adult may begin creating a Maryland legacy plan and estate plan. It is beneficial to begin the process as soon as possible, to allow for adjustments and thoroughness. You may begin by compiling essential documents. From this point, you may meet with an estate and legacy planning professional for a consultation. As it relates to estate planning, be prepared to revisit your plan periodically to ensure it is in line with your priorities and allows you to leave behind an ideal legacy.