When you think of leaving a legacy, you might picture passing down wealth and cherished belongings to loved ones or supporting causes that matter to you, all after you’re gone. But what if you could create a living legacy—one you could see making a difference right now? Instead of waiting for your legacy to unfold in the distant future, there are ways to make a positive impact today while also planning for tomorrow. Here's how to approach this meaningful financial journey.
1. Embrace Philanthropy Now
Many people assume that charitable giving is something best done later in life or through a bequest in their will. However, incorporating philanthropy into your financial plan today allows you to witness the difference you’re making in real time. Whether it’s donating to a cause you’re passionate about, supporting local nonprofits, or establishing a donor-advised fund, you can witness the results of your generosity.
Even modest donations can have a substantial effect, particularly when targeted to organizations that resonate with your values. Consider taking an active role by volunteering your time and sharing your knowledge with the charities you support. You can extend the reach of your donations and see firsthand how your contributions are improving lives.
2. Help Your Loved Ones Reach Their Goals
Providing financial assistance to loved ones now can have a tremendous impact. Gifting can come in many forms—such as helping a grandchild pay for college, assisting your adult children in purchasing a home, or backing a family member's business venture.
When done thoughtfully and with a plan in place, giving financial gifts during your lifetime can strengthen family bonds and help the next generation get a head start toward financial security. Plus, there are tax advantages to lifetime gifting, such as the annual gift tax exclusion, which can help you transfer wealth without incurring additional tax liabilities.
3. Invest in Your Community
Community involvement is another avenue for leaving a living legacy. Supporting local businesses, sponsoring community events, or making targeted investments in the area where you live can lead to a stronger and more vibrant community. You don’t have to be a billionaire philanthropist to make a meaningful difference; small actions can have a big impact.
Think about what matters to you locally. It might be supporting education initiatives, improving public spaces, or funding youth programs. Investing in your community allows you to leave a mark that you can take pride in while still enjoying your day-to-day life.
4. Fund a Cause You’re Passionate About
You can also use your investments to support causes that align with your values through responsible investing strategies. For instance, impact investing lets you allocate your funds toward companies and projects that seek to generate positive social or environmental change. Many investors find that aligning their portfolios with their values fosters fulfillment.
Impact investing is more than a feel-good approach; it’s a way to direct capital toward solutions for global challenges like renewable energy, social equity, or sustainable agriculture. Choosing investments based on your principles can allow you to see the direct effects of your financial decisions and participate in creating a better world. Consider working with a fiduciary financial advisor to help you create a properly diversified portfolio that integrates your objectives.
5. Share Your Knowledge
A living legacy isn’t just about money. One of the most valuable things you can pass on is your wisdom and experience. Mentoring young professionals, teaching a skill, or simply sharing your life lessons can be incredibly rewarding.
Think about the knowledge you’ve gained over the years and the skills that have helped you succeed. By sharing those insights with others, you can have a lasting impact on the people around you.
This might mean becoming a mentor for young people in your community or teaching a course at the local college. The time and effort you spend helping others can be just as impactful as any financial gift.
Consider the Financial Aspects of Your Living Legacy
While creating a positive impact is deeply rewarding, it’s essential to ensure that your financial well-being remains on track. Here are some steps to consider:
Assess your financial readiness: Before you start gifting money or investing in philanthropic ventures, make sure your financial house is in order. You’ll want to feel confident your own retirement savings and other financial goals are secure.
Understand the tax implications: Charitable giving, gifts to family members, and impact investments can have tax consequences. Consulting with a professional can help you maximize the benefits while minimizing the tax burden.
Plan for sustainability: If you want your living legacy to have a long-term impact, think about how you can continue supporting your causes over time. This might mean setting up a fund, establishing a trust, or creating a strategy to allocate a portion of your investment returns toward giving.
Work with a Fiduciary Financial Advisor
Navigating the financial considerations of a living legacy can be complex. A fiduciary financial advisor can help you integrate your charitable goals with your broader estate plan so that your generosity aligns with your long-term financial stability.
At Northstar Financial Planners, we assist clients who want to live out their legacies today, balancing financial responsibility with meaningful giving. Working with an advisor could provide clarity and confidence as you seek to make a lasting impact.
Creating a living legacy lets you experience the joy of making a difference now. Whether it’s through philanthropy, family support, community involvement, or sharing your knowledge, you have many ways to create an impact that you can witness every day.
Schedule a complimentary consultation with one of our fiduciary, fee-only financial planners to discuss your personal situation.
This material was written in collaboration with artificial intelligence (ChatGPT) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.