Your Legacy

Upon your passing, You will have a legacy.


It can range from a Checking Account

to a Multi-Million dollar estate.


Both will have some of the same factors to consider.


Definition of legacy



1:  a gift by will especially of money or other personal property: bequest<She left us a legacy of a million dollars.>


2:  something transmitted by or received from an ancestor or predecessor or from the past <the legacy of the ancient philosophers><The war left a legacy of pain and suffering.>…


legacy transferr assets


Too often individuals will think that whatever is left over as their “legacy”.


From there you can expand what is being passed on to others.  Question yourself as to what and how much you want to pass on and to whom.


It is possible to create a financial estate by working with Life insurance and Annuities that will benefit you now and pass an excellent bequest.   Will charitable gifts be of interest?  What are the Tax implications of what you pass on? Will the recipient be responsible when receiving a legacy?


Should you gift to charities the high capital gain items/ Reserving more favorably taxed items for the Family.



IRA CD Annuities BONDS



On the family side of gifting

One technique often used is to convert IRA monies into life insurance.  This creates an immediate legacy with the first premium.  This will be passed TAX FREE to whomever you select. A Second benefit is that you can optimize the IRA value (100% taxable), often creating Life insurance value as great or greater than the IRA.  At the least, it will pass your IRA with the taxes being paid by the life insurance policy.


Annuities can provide a lifetime income for your heir.  While you are the owner of an annuity you will not pay taxes until the money is taken out. This is an immediate annual tax saving for you.  Your heir inherits an annuity, there are several options.


 1. Take all the money in a lump sum and pay taxes on the growth as one would with some securities.  2. Take it over a 5 year period and spread the taxes over a 5 year period.    3.  Take the annuity as a lifetime income. 


Quite similar to Social Security which is an Annuity.   Spreading the taxes over one’s lifetime.  This also ensures that the heir will always have additional income for life.  




Similarity to be noted


With an annuity the gains are tax deferred until the money in removed and ordinary income tax rates apply.  With a Traditional IRA all of the value is 100% taxable as monies are taken out.  Also taxed at ordinary income tax rates.  With a ROTH IRA the taxes were paid before contributions and the growth is tax free.   Most stocks and mutual funds currently pass on a stepped up value.  Bypassing the capital gains problem  


When you are gifting something, you need to consider any tax implications.  Which asset to gift and to whom.  




Non – Family gifting


Some caution needs to be noted.  Assets passed to a Charity, Church or some other 501c3 organizations will not pay taxes upon the receipt.  With that in mind, select the assets that are high growth items such as real estate that is not liquid.


Saving the more liquid assets for the family.   For the non-family entity, make sure of their tax status beforehand.   You could do great harm to them by giving them a highly taxable asset.  They may not be able to pay any tax bill. Forcing a “Fire sale ” of the asset.