THOUGHTS ON CREATING A LEGACY THAT LASTS
Father’s Day 2017 is almost here. What key questions should we all be pondering this year, to help create valuable legacies that last for more than a generation?
Despite the headlines that declare many major American retailers are struggling, the National Retail Federation predicts that spending on Father’s Day gifts will hit a 15 year high in 2017, with around $14.3B being spent. A larger part of this spending this year is expected to be spent on experiences rather than material gifts, according to Market Watch. Here are some questions we all might want to think about as June 18th comes around… As Fathers:
As Children:
As Friends:
Father’s Day 2017 Gift Ideas Still need gift ideas?
Summary Whether you are a father, child, or just know some dads; there are lots of things to think about this Father’s Day. Just don’t forget to spend some quality time with someone special. Bookmark this page for whenever you need a gift idea for an important Father!
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TYPES OF REAL ESTATE INVESTMENT FOR BUILDING A LEGACY
Which types of real estate investment may be best for building a legacy estate?
Real estate investment can be one of the best tools for preserving, growing, and optimizing an estate, and creating a legacy that will go on giving during your lifetime and beyond. The exact mix of investments, and structures which are best for your individual portfolio are certainly a personal decision. They will depend on what you are starting with, your anticipated timeline, and your age and health, and that of your heirs. However, the following are some staple selections which can be a great fit for many estate plans. The Family Home The most common type of property in most estates is the family home. The associated tax breaks and legal shelters this asset offers is one of the reasons that sophisticated individuals often invest so heavily in their primary residences. The one caveat here is considering what heirs will really want to do with that property after you pass, and perhaps your long term housing needs. Should it be kept, or will it become a burden? When is the optimal time to resize your residence? Second Homes & Vacation Homes These types of properties can often offer a hybrid combination of the benefits of pure investment real estate and personal residences. They can also offer geographic diversification for your portfolio, and often an equity building head start on a retirement home. This may also provide an advantage in shifting residency to a safer and lower tax environment later. Student Housing Higher education is only getting more expensive, and so is student housing. If your children are still planning on attending college it may be beneficial to secure them housing near to education. Any additional income or equity produced by the property could offset education expenses as well. Starter Homes The recent and current real estate and finance environment has left a significant void in lending and benefits of leaving money deposited in the bank. This has created a new trend and more advantages in parents financing their children’s starter homes. It reduces the burden and credit hit for children, while helping to get the most out of capital for parents. Explore different options for gifting down payments or providing private mortgage loans, and the tax breaks. Commercial Income Properties With so much of the above invested in the residential market it can be wise to diversify into commercial properties for income and wealth preservation. Retail, office, multifamily, and mixed use properties can all offer diversification as well as passive income for principals and heirs for the long term. Future Development Sites Land, infill lots, and prime buildings which are ripe for future development can balance other assets by providing potential for bigger wealth leaps and cash gains. These investments can be staggered to deliver at different life milestones while minimizing holding costs and management now. You don’t have to be the one to develop or build either. You could sell the opportunity on, or partner with someone else. Summary All of the above may be great choices for your estate and portfolio. Leveraging 1031 exchanges, trusts, and self-directed retirement accounts for limiting liability and taxes can make these options even better too. DESIGNING YOUR LEGACY: TIME TO SHRED YOUR 5 YEAR PLAN
If you want to enjoy significant and sustainable family wealth, and a legacy which really makes a difference it may be time to rethink your financial plan.
Having a five year plan was supposed to be a big deal. Of course over the last decade millions of Americans and American companies have gone bankrupt. Unlikely that was in their plan, but it may be partially due to how short term their plans were. Meanwhile other international corporations, and a few leading investors and firms have thrived. The biggest difference with the latter group is their passion for having a 100 year plan. If you don’t want to only do well for the next five years, but for the next ten, for the next few decades of your children’s lives, and perhaps their children as well you need to think bigger and longer. This applies if you have no plans for kids, and simply want to take care of your pet or to take care of a favorite cause, charity, or community instead. How long do you want your legacy to last? How big do you want it to be? Put numbers on those things. Then work backwards to understand the steps that need to be taken to get there. There are several parts to putting this type of legacy and estate planning into action:
While many avoid it, having conversations with your heirs about your estate and legacy plans early and often can be wise. Otherwise how will they know what you want, how to manage it best, and who to get help from? Tell them, show them, and explain why. If you don’t have these conversations the chances are that you won’t get what you want. The wrong assets will get sold, they will be managed poorly, and the causes you care most about won’t be supported. And without a master plan odds are that you won’t arrive where you want to be on time. None of us really know what will happen tomorrow, but you can put things into play now, today, which will put your legacy on the right track regardless of whether you are around to manage your finances and investments for another 12 months, 12 years, or 120 years. |
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