Legacy Estate Planning Strategies 101

Building wealth today is only one piece of the financial puzzle, and yet it’s the piece that often gets the most attention. After all, if you don’t build wealth, you’ve got nothing to protect. And yet, if you’re going to go to the effort of building wealth, why would you leave room for it to be undermined or destroyed? Protection is an essential step and one that you don’t want to wait to take. If you’re in the business of creating wealth, you want to be in the business of creating a legacy estate planning strategy. 

What is Estate Planning?

Estate planning is all about putting legal structures in place that direct how your estate should be managed in the event that you no longer can. While most often this means death, you also want to consider who will be in charge of your estate if you are declared unable to while you’re still alive. Your estate is the combination of all your assets and property. 

When you create an estate plan, you put your desires for your wealth into legal terms. This can protect your wealth from going to the wrong people or getting lost altogether. And it can ensure that if you are no longer able to make your own decisions one day, the person assigned to make them for you is one of your choosing.

Estate Planning vs. a Will

Estate planning certainly includes a last will and testament, yet it doesn’t stop there. At the very least, you also want to identify a power of attorney. If you have significant assets, estate planning an include the creation of trusts, which allow you to put further legal protections on your assets. This can keep your money from ending up where you don’t want it to be.

Estate planning doesn’t have to be labor intensive, though it should be robust and well-rounded. That way you can ensure that you control the flow of your wealth down to the last dollar. 

Why is Estate Planning Important?

When it comes to estate planning, many people may believe that it’s “overkill.” After all, you’ll be dead, so who cares what happens to your stuff, right? Well, if you have that attitude, you might be in the wrong place. 

For starters, legacy planning is all about the gifts you leave to your loved ones—including generational wealth. If you want your family to thrive well beyond your time, you’ve got to include estate planning in your process. Otherwise, upon your death, your money will be subjected to maximal taxation, can get depleted in probate court, and is open season for creditors. By the end, your heirs may be left with little.

Yet properly stewarded, your heirs could receive an optimal inheritance with little interference, which they could then use to fund a new family banking system. This would give them further opportunities and the chance to go even further. 

Another reason estate planning is important is that without these documents, you can cause unnecessary strife for your family. Rather than a smooth process that provides your loved ones the space to grieve, you could leave your heirs with years worth of responsibilities cleaning up an unorganized estate. Dragging out this process can be an emotional and financial burden, and makes an already difficult time worse. An estate plan is an act of love. 

Essential Estate Planning Documents

While it’s possible to DIY your estate planning experience, it’s generally preferable to work with an estate planning attorney. They’ll have the best idea of what is going to benefit your particular estate, based on your assets, as well as your family dynamics. That being said, below is an overview of the most common documents or structures that you can expect. 

Last Will and Testament

A last will and testament should be your bare minimum for estate planning. This is the document that allows you to identify exactly what should happen to your estate in the event of your death. You can include who you want to leave your personal property to and where you want your money to go. 

This is also essential if you have a young family. If you have kids, you’ll want to include who you’d like to take guardianship of them in the event of your death. (You should, of course, ask your loved ones if they would be willing and able.) If you have pets, you can even designate a new caretaker for them. 

Without a last will and testament, your property and assets will be handled by the government, and you won’t have a say in any of it. Your will is something you should have regardless of your personal wealth, and you should update it regularly. 


Trusts are legal entities run by a third party that can hold or own assets on behalf of your beneficiaries. By transferring ownership of an asset to a trust, that trust is no longer a part of your legal estate, which means that it’s not subject to estate taxes. Trusts are a great way to transfer significant wealth from one generation to the next.

However, trusts are also complicated legal structures and can be expensive to set up. Not everyone will benefit from having a trust, and there are many kinds of trusts that all serve different purposes. If you’re considering a trust, it’s best to work with a Prosperity Economics-friendly estate planning attorney. You can chat with them about your vision, and they can identify and set up the best trust for your objectives. 

Some types of trusts include:

  • Charitable Remainder Trusts, which create an income stream and distribute the remainder to charities of your choice
  • Marital Trusts, which provide income to a surviving spouse
  • Irrevocable Life Insurance Trusts, which help to exclude life insurance from estate taxation

Power of Attorney

Power of attorney is the other legal document that should be considered mandatory, regardless of your wealth. This is a legal document that allows someone the power to make decisions for you, should you become unable. For example, if you develop dementia and are declared unfit to make decisions or sign legal documents, your power of attorney would kick in. The person with POA would not only be able to make health decisions for you, but they would also have control of your estate and could make financial decisions.

POA isn’t always permanent, either. Sometimes people go through a temporary period of disability that may prevent them from being able to make decisions. 

You can see why it’s important to choose someone you trust, who understands your values and what matters to you. This may change over your lifetime and should be updated regularly, along with your will. If you do not designate your own power of attorney, the court can appoint one for you. 

Digital Assets in Estate Planning

Another critical aspect of estate planning that often gets left out is the importance of digital asset protection. Regardless of what your Will says, if your loved ones don’t have access to your various accounts, they could potentially be locked out, and your assets could vanish into thin air. 

Of course, you don’t necessarily want everyone you know to have all your passwords while you’re alive. That’s why something like Protect myPlans is so critical. It’s a highly secure way of organizing all of your digital assets—including things like your social media and email, which can have important information. That way nothing you own will be lost to loved ones. 

In addition, you want to make sure that your loved ones know HOW to manage your things, and where to find important documents. The Torch is a way of creating a digital guidebook for anyone taking over your estate. That way your family knows how to manage your household, when certain bills need to be paid, or how to contact companies to let them know you’ve passed. You can even give exact instructions for animal care if you have pets. This way, nothing slips through the cracks. 

Tax Considerations

There are, of course, tax considerations to be made when you’re legacy planning. Estate tax occurs when you transfer property upon your death. While this is something everyone has to deal with, a proper estate plan can help you minimize it. 

Ultimately, transferring ownership of certain assets to trusts is a great way to reduce taxes. However, you don’t want all of your assets to be controlled by trusts. An attorney can help you figure out the right balance. Then, there’s whole life insurance.

The Role of Whole Life Insurance in Legacy Estate Planning

Whole life insurance is one of the most efficient ways to transfer wealth to your heirs because the death benefit is income tax-free. It’s also free of estate tax unless the benefit exceeds the state tax threshold, which varies by state. 

This means that if you want to distribute significant wealth to your beneficiaries, whole life insurance is an excellent way to do it. In addition, it’s a private asset, which means that the IRS and creditors can’t see what you have. And of course, because of the policy loan provision, you can also use it while you’re alive, which means it’s valuable in life as well as death. 

Just remember, whoever you designate as beneficiaries is who the life insurance company will pay, regardless of what your will says. Be sure to update both regularly, at the same time, to reduce errors. 

Estate Planning for Different Life Stages and When to Update Your Plan

Estate planning is critical no matter how old you are, or what you have because life is uncertain and you don’t know how much time you have. Yet because of that, you also want to make sure you’re regularly updating your estate plan. Consider it a living strategy, rather than a static one. After all, you’ll have different seasons of your life.

Some people set up an annual appointment with their attorney to make any updates. Others simply wait for major life events, like birth, death, marriage, or divorce. Whatever you do, be consistent. If you think you have the discipline to wait for every life event, go for it, otherwise, you risk a faux pas like leaving your youngest child off of the will or keeping your ex-spouse on the will. 

If you add new assets to your portfolio, it’s also a good time to review your estate plan, so you can determine if you need to rebalance any distributions or create a new trust. 

Working with an Estate Planning Attorney

At the end of the day, if you want your estate planning done right, it’s best to work with an attorney. In addition to helping you file your most basic documents, they’ll have invaluable insights on what to include and any strategies that could save you on taxes, or at least prevent future headaches. 

We highly recommend finding an attorney who is associated with the National Network of Estate Planning Attornies. All attornies in this registry go through special training from our friend Rick Randall, who ensures that they know how to deal with life insurance the Prosperity Economics way. 

If we can help you with your life insurance, be sure to reach out to us at we*****@pr****************.com or book with us today.

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