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Planning a Legacy: How to Continue ‘The Story of You’

By Mark E. Caner, MBA, AEP, ChFC, CLU, CFP®
Life Insurance
Couple talking with an advisor

Seasoned financial representatives value the benefits of story selling, the art of using stories to communicate complex financial concepts in a way that helps enhance client understanding. But when it comes to legacy planning, there are ways a story can help both a financial representative and a client get on the same page. It starts by considering legacy planning as a way for a client to determine how their personal “story” will be portrayed after they’re gone. 

By presenting legacy planning as continuing the “Story of You,” a financial representative and client can more smoothly progress past any initial uneasiness on to planning for a client’s life’s “characters,” namely the people and organizations most important to them. This is where goals and values embraced over a lifetime can continue to be advanced even after a client’s passing.

The script a client creates will help guide what develops for these characters in the story ahead. A helpful way to start the process is to ask questions such as:

  • “What is the ideal scenario for your legacy after you’re gone?”
  • “Who do you want to play a part in your legacy?”
  • “What risks would you like to address in your plan?”

Questions such as these can help clients begin to put their desired personal story into words. They can help solidify thinking and direct action to create the history of their life the client would like to direct and perpetuate. They also provide an opportunity for financial professionals to help clients understand the distinctions between estate and legacy planning.

Estate Planning vs. Legacy Planning

Estate planning and legacy planning may strike many clients as two terms describing the same thing. Helping clarify the distinctions between them is an important step in encouraging a client to take action.

First, financial representatives should consider estate planning as the blueprint or instruction manual of “how” clients would like their assets to be distributed at death. An estate plan can be simple or highly detailed, depending on the types of assets being transferred and the number, ages and personal characteristics of the beneficiaries. An attorney’s expertise is essential in preparing a will or trust, as well as the other associated elements necessary to carry out a person’s wishes.

Legacy planning provides “meaning” to each of the decisions made in preparing an estate plan. A legacy plan is the result of consultative conversations between financial representatives, the client and members of the client’s estate planning team of advisors. These discussions help develop a clear picture of the purpose, elements and alternatives for forming an estate plan, including identifying strategies and any financial products that may help support the estate plan. The financial representative begins this process by working with the client to assemble an inventory of assets owned and whether and how they are to be transferred to heirs or others.

Identifying the Story’s Characters

Planning for how a client’s story will continue after they are gone includes identifying who will continue to play a part in that story. Such a list may include a spouse, children, grandchildren or other people or a favorite non-profit organization, university, cause or religious institution.

Once that list is assembled, it is time to help determine how a client’s story may continue to make an impact. This is more than simply listing who gets what. It also is exploring what a client hopes those individuals or organizations will be capable of doing with the assets they receive. These conversations may be very emotional as they will involve a client sharing how to benefit loved ones and most important causes after the client’s death. It may include a number of specific desired scenarios, such as ensuring a child has funds for college or helping a non-profit organization expand its outreach services.

There likewise is a practical reason for identifying who will play a role in a client’s story. Even with the best possible planning in place, it is essential that the assets that will be passed on are properly titled and that any beneficiary designations match the intentions of the estate plan. The reason is that the way assets are titled or beneficiaries are designated generally take precedence over the estate plan. This makes it critical that asset titling and beneficiary designations precisely meet the client’s wishes for their legacy.

Finding a Way Forward

A memorable story often involves a conflict that requires resolution. Making sure the “Story of You” continues after a client is gone is no different. Ensuring assets are properly titled and the right beneficiaries are designated holds potential for conflict that can be averted by carefully planning a legacy. Other potential conflicts exist as well, ones that also must be resolved before they jeopardize how the story of that person unfolds.

A major conflict that could arise is the potential tax implications of an estate. These could come from federal or state estate taxes, which can vary from year to year depending on legislation. A financial representative can play a major role in helping the story of a client continue to benefit the desired people and organizations a client has identified. One way is by finding wealth transfer options that trigger the lowest possible tax bill. This may extend not only to the tax burden on the estate, but to the income tax that beneficiaries may have to face when they inherit certain assets.

Another consideration should be what role probate might play. The effects of probate can complicate a legacy plan and require a great amount of time to resolve. Utilizing the right strategies can help avoid this issue.

Considering the Road Less Taken

While the mention of life insurance may not immediately be prominent in the legacy planning conversation, a client may find that a life policy is an efficient way to move money to the next generation without income taxes or probate involvement. Properly structured, a life policy can provide a death benefit to a named beneficiary free of estate taxes as well as income taxes. This requires a thorough review with a financial representative to consider how life insurance may ensure payment of a death benefit that helps meet the planning aims of the client.

Writing the Next Chapters of the “Story of You”

A consultative approach to legacy planning requires open dialogue about the aspirations clients have for their assets and how their story is to continue. It enables a client to not only play an active role in how an estate plan will  be designed, but to have their values cultivated in their life continued through their legacy.  By using a client’s life story as a way to begin this process, a financial representative can further understand a client’s needs and play a pivotal role in the continuation of that story.

Mark E. Caner

Mark E. Caner, MBA, AEP, ChFC, CLU, CFP®

Mark is responsible for leading four sales channels. In addition, he has responsibility for relationship management, marketing, product development, and sales support.

Permission to quote or cite from this material is granted upon request. To obtain permission, or for additional insights on this topic, please contact us.

Securities offered through Touchstone Securities, Inc. Cincinnati, OH, a registered broker-dealer and member FINRA/SIPC.

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