Protecting Your Legacy

Dec 11, 2017

MoneyLife100You’ve built a good life for yourself and your loved ones, and you’re expecting to leave them financially secure when you’re gone. But some people don’t reach this goal because of simple oversights in their planning for the future. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers advice that will help you keep your legacy intact.

Write a Will

Only 44 percent of Americans have a will, according to a Gallup poll, down from roughly half who had one a decade ago. Wills aren’t just for the wealthy. They protect your heirs from a great deal of unnecessary complexity and confusion. If you die without a will, your property will be handled based on state law, which means it may not necessarily go to the people you would like or it may take your chosen heirs longer and cost them more to get their inheritance. You can also use a will to name a trusted executor to carry out your wishes.

Update Your Beneficiary Designations on Your Investment Accounts

Even though a will is an important estate document to have in place, in most cases the beneficiary designations on retirement accounts, annuities, and life insurance will supersede anything to the contrary that is written in the will.

Don’t Overlook Kids’ Needs

You want to leave funds to cover your family’s needs when you’re gone, but who will manage those funds if you die when your children are still young? You can use a will to establish a legal guardian for your children if you and your spouse both die. If you don’t select someone, the decision may be left to a judge. You may also want to decide on a trustee or custodian to manage a child’s inheritance. This person can oversee what you leave for your children and allocate money for them until they’re mature enough to manage it themselves. Consult an attorney for more details on how this can be accomplished.

Get All Your Paperwork in Order

There are other documents you will want to consider in addition to a will. An advance health care directive, or living will, establishes how you want certain medical decisions handled in case you are incapacitated, and a health care proxy names someone who will make health care decisions on your behalf if you’re incapacitated. Power of attorney is a broader document that names someone who can make decisions for you in a range of areas, not just health care. Store these papers in a secure, fireproof place. Don’t forget to tell your loved ones where to find these critical documents. Give them keys to safe deposit boxes or home safes, as well as links and passwords for account information accessible online.

Don’t Neglect the Present

If you’re comfortable financially, you may be able to make a powerful difference for your loved ones or your favorite causes by sharing some of your legacy today. Consider making investments in your family’s future by, for example, contributing toward the cost of a college education or toward a down payment on a home that will increase in value over the years. One incentive: You can give up to $14,000 ($28,000 for a married couple) a year to any individual tax free and without having to fill out a gift tax return. Also, gifts for tuition or medical expenses generally are not taxable gifts. You can also enjoy the good you’ll do if you make a charitable contribution now.

Consult Your Local CPA

Whether you’re planning your estate or considering how to manage your legacy today, your local CPA can help. Turn to him or her for expert answers to all your financial questions. To find a CPA in your area or for more financial tips, visit

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest state CPA organization in the United States.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.