Saturday, November 11, 2006

Legacy or Estate Planning?

Henry Doorn, executive director of the Barnabas Foundation spoke at the Mission India conference. He noted (something I discovered, later, he must have gotten from Ron Blue), that there are only three places your money can go when you die: to your heirs (family, friends), to charity, or to the government. He didn't quite put it this way, but my mind put his follow-through question together with the lead-in to Evangelism Explosion's standard opening question ("If you were to die tonight, do you know for sure that you would go to heaven?") and I heard him say, "If you were to die tonight, do you know where your money would go?"

And my answer: a shocked, "No! I don't!" --Even though Sarita and I have very carefully prepared final documents.

The problem: We know we have done everything possible, via estate planning, to minimize taxes and maximize transfer to our heirs, our children. But we have done nothing to ensure anything goes to any of the charities we care about.

And the reason for this, as I realized when I spoke with Mr. Doorn later that day and as I read Blue's book, we (Sarita and I) have been dealing with estate planning professionals and not, as Blue refers to them, "wealth transfer" professionals, or, as others refer to them, "legacy planners."

I have modified Blue's summary of the differences as found on page 38 in his book:

Wealth Transfer or Legacy Planning

. . . Focuses, as a goal, upon transfer of ownership.

. . . Considers, as first priority, the impact of wealth transfer on recipients.

. . . Expects implementation--i.e., the transfer of wealth--to begin now.

. . . Involves family input first and professional advice later. [Note: As I am learning, there are professionals who can help us work through the process of acquiring family input; but their role is to help us acquire family input--perhaps along with some education about the breadth of options we might want to consider; but it is not, at that point, to advise us about which options are "better" or "worse." . . . Only after receiving the family input will such a professional, then, seek to advise us about the pros and cons of the different options.]

. . . Makes decisions based on considerations of Godly stewardship.

. . . Seeks to bring honor to God.

Estate Planning, on the other hand,

. . . Focuses on retaining control of assets as long as possible--possibly, even, beyond the grave.

. . . Considers, as first priority, the impact of wealth transfer on the donor and the estate.

. . . Expects implementation--i.e., the transfer of wealth--to begin at death.

. . . Involves professional advice first and family input later. ("Here's what the attorney suggests; what do you think?")

. . . Makes decisions based on tax implications.

. . . Seeks to bring honor to . . . (God? or the donor?).

I look at these two lists and I want to move toward Legacy Planning. I'm bummed we had never heard of the concept when we first went to our estate planning attorney.
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