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Leave a legacy

What do you want to pass on to your loved ones? A legacy is more than money or property: It's everything you leave for future generations.

Four pillars of a legacy

  1. Values and life lessons. The non-financial aspects, such as a sense of ethics or morality, faith or religion, and family traditions, rituals, and stories.
  2. Instructions and wishes. Directives including taking care of a loved one, ensuring that someone finishes an education, funeral instructions, etc.
  3. Personal possessions with emotional value. Possessions that may be of little or no financial worth but carry the sentiments, memories, and emotions of a lifetime.
  4. Financial assets or real estate. Elements of financial value, which are typically considered part of an estate plan or will.
A proxy for your money
Like a health care proxy, a durable power of attorney can specify how you want your financial affairs dealt with in case you become disabled or suffer a serious illness, and it designates someone who can make any financial decisions on your behalf.
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How to help ensure a successful legacy transfer

  • Create and maintain legal documents that outline your wishes and priorities — e.g., a power of attorney for finance and healthcare, advance directives, a living will, and updated beneficiary designations.
  • Consider ways to create your legacy throughout your retirement, such as paying for a grandchild's education or giving to your community.
  • Charitable giving can create an opportunity to balance providing for your heirs with your interest in contributing to the future of a favorite organization or institution.

Use gift tax exclusions

If you want to share your legacy while you're still alive, consider making use of the gift tax exclusions:
  • The annual gift tax exclusion This exclusion allows an individual to give $15,000 — or a married couple to give $30,000 — to as many people as desired without tax implications in 2021. The annual exclusion amount is adjusted for inflation each year.
  • Lifetime gift tax exclusion You are currently allowed to make a total lifetime gift of $11.7 million on a tax-exempt basis.
Trusts: Not just for the wealthy
More Americans are discovering the potential of a trust to help:

  • Protect their assets
  • Reduce their taxes
  • Define the management of assets
Review trusts regularly with your attorney in conjunction with a will.
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Decide in advance who
you would want to take
control of your financial
matters for you

Be prepared to transfer control

There may come a time when managing your finances becomes a burden, or you are unable to manage them yourself. Decide in advance who you would want to take control of your financial matters for you, or consider hiring a professional money manager to handle your financial affairs.
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Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.