We all have alarm clocks. Some tie us to our physical life, like meeting notifications and taking food out of the oven. Others are more ephemeral, like the biological clock. Alarm clocks serve a purpose; they keep us on track, they remind us to do things, and in some cases they push us acting as a pressure tactic. We relate to alarms and clocks differently depending on who sets them, why they were set, when they are going off and if there is a “Snooze Button.” The alarm clock for legacy planning is couched in the term “Shared Urgency.”
The legacy alarm clock creates a sense of urgency, not just by the person whose legacy is being created, but also for whom the legacy will be entrusted. Shared Urgency is an emotional response to an impending financial transaction resulting from a loss of a loved one.
This emotional response is based upon feelings associated with the:
- timing and expectations around the assets in question,
- relationship with the individual who set up the legacy and
- needs of the recipients in advance of the transfer of assets as well as a result of that transfer.
Emotions are tied to values
Shared Urgency stems, in part, from the values-based answers to questions of what does wealth mean to you and to the others who are part of the legacy question. These others can be family, friends, charities that you are involved with, business partners, and other community stakeholders.
By sharing the answers to the values questions around wealth, you can start to address the expectations others may have about their responsibility to managing your legacy. This may also help manage the expectations of recipient organizations on timing of use of proceeds they may receive.
Depending on how you answer these questions, and with whom you choose to communicate your answers to, you might be able to better articulate the timing of the sale of shares, liquidating a business, and tax planning. Understanding everyone’s sense of timing around the wealth is a key component to the philanthropy planning process. The more open you are in communicating your legacy plan, the easier it is to assuage the sense of urgency that can be felt in relation to your wealth.
Tapping into Shared Urgency emotions will help map out the time horizon of your business activities, your charitable activities, and other financial transactions. These emotions also help identify what, how, when and to whom you choose to communicate your wealth and legacy plan.
Time Horizon of Giving – Growth or Harvest
There are three phases of wealth – Growth, Maintenance and Harvest. Your philanthropy plan follows these phases. How you determine your time horizon is based upon where you are in your life-cycle, your career cycle and your overall financial cycle.
Aligned with your wealth phases, your philanthropy plan is broken into three distinct timelines:
- immediate (this year),
- mid-term (five to ten years) and
- long-term (multiple generations).
Your philanthropy plan follows your three life-cycle timelines. As you plan your legacy we encourage you to share what you are thinking and planning with those who will be entrusted with actioning your legacy.
We know that starting this conversation can be hard, so we have created some questions for you to consider in an effort to warm you up, and provide some food for thought for those who will be part of executing your legacy. You can find the Legacy Interview Questions here.
This Legacy Conversation post is a starting point to help you think about your philanthropic goals and legacy plan. For more resources please visit our website – www.KarmaAndCents.com and contact us at info@KarmaAndCents.com or at 1-866-936-GIVE(4483). We’re here to answer your questions and help you align your giving with your overall wealth planning strategies.