Legacy Planning: Two Distinct Types of People
Through the twenty-plus years in this business and thousands of clients I’ve interacted with I’ve seen quite a bit. I’ve had the pleasure of listening to people’s deepest darkest wishes and dreams. Part of that discussion, and a large part, is on legacy planning. It strikes a chord with most people as addressing their eventual end on this planet is a sobering thought. What makes this discussion even more interesting is I’ve found when it comes to legacy planning there truly are two very distinct types of people. I find it a really interesting topic and will be curious to know which camp or person you are.
Spend it all
Ahhhhh the “spend it all” camp, or more affectionately referred to as, “I want my last check to bounce camp.” These people are of the mentality they worked hard, and now time to play hard. They’ll generally help out family and friends along the way, but what I’ve found is they have an eye on the here and now.
The “spend it all” camp’s legacy is living a full life I’ve noticed. They want their children to “work” for it as they did, and if there are funds left over so be it. That said they don’t have a specific wish to leave others wealthy, or well off upon their eventual demise.
These people are generous with their assets but tend to put a higher priority on living for today. I also notice they feel leaving lots of money behind can be a detriment to their heirs. Working and creating one’s own wealth for this camp simply builds character that leaving a lump of cash can’t possibly do. At the end of the day if there is money left over great, but their intention is to go out in a blaze of glory.
Leave a lot behind
Now if camp A. spends every last cent, clearly camp B. is leaving as much behind as possible. This isn’t to say this group of individuals isn’t living their best life now, but there is a very noticeable and minute mind shift. These individuals prioritize leaving money behind for their loved ones, over spending it all today. Now I’ve seen many extremes of this through the years. You have your 80-year-olds who literally don’t spend a dime because they want to maximize their inheritance, and then you have your 50-year-olds who spend but have purchased large insurance policies for each child to guarantee a financial legacy.
The thought pattern here, I’ve noticed, is just a reprioritization. The “leave money behind” camp generally thinks more about post-mortem legacy and how their funds can help, not hurt, their loved ones. They see money not as a negative and simply as an additive to their children. Many of them go to great lengths to educate their children on the power and importance of money. Others utilize extensive estate and trust planning to make sure these funds left behind are not only protected but respected and appreciated.
Who am I?
Ok, so the question at hand is who are you? If I were to self-reflect for a minute, I can certainly identify with both camps. I’ve heard great logic from people I truly respect on both sides of the fence. That said we all tend to choose one.
I think, actually I know, that if I were being honest, I’d tell you I fall into camp two. Perhaps it’s because I’ve gone to great lengths to save money and know how hard it is. Or maybe it is due to the industry I am in. Honestly, though whatever the path that led me here it is clear to me, but in my words and my actions, I am already preparing to leave a purposeful financial legacy to my heirs.
Last thoughts on the manner. To me, the most important thing to consider is actually considering and giving thought to what type of person you are. This will prove helpful in your financial planning and how you intend to live your golden years.
Stay wealthy, healthy, and happy.