Manage Your Estate

Planning Your Legacy

Estate planning is the process of determining what happens to your assets after you pass away. An estate plan can be part of a well-built financial plan; however, properly balancing your financial needs in retirement with the goal of leaving a legacy means potentially adjusting your investing goals, time horizon and asset allocation.

Estate planning can be complex. A good plan should fit your goals and wishes. Please understand, however, that the options highlighted on this page are not exhaustive, nor are they tailored to your personal situation. We recommend contacting an estate planning attorney or dedicated estate planning specialist to establish your own plan.

Implementing Your Plan

Who, When, and How Much

The first step is setting specific goals for your legacy so the outcome isn’t left to chance. This will give your estate plan direction, but it can also affect the investment strategy you’ll need to implement.

Begin by thinking about your beneficiaries. Parents often prioritize their children or other family members. Others want to leave gifts to charitable organizations or an alma mater. There’s no right or wrong answer.

Next, consider your intentions for a legacy. This is your chance to answer the big questions: who, when and how much. Common examples include

• Distribute as much money as possible
• Leave a specific dollar amount
• Give whatever is left from your retirement portfolio after you’re gone

Be specific when you set your goals. If you want to pass money to your children, you could specify amounts for each child or split a total amount equally across them. You may also split the amount among family and friends. Depending on the amount, you might even want to create an ongoing gift for future generations by establishing an endowment or scholarship fund. 

Setting specific goals is important for your legacy planning because your beneficiaries and your intentions help determine your portfolio’s investment time horizon and optimal asset allocation—essential investing decisions.

Adjust Your Time Horizon

Your investment time horizon is how long you need your assets to last. With typical retirement planning, your time horizon is likely governed by your life span and that of your spouse or partner. But leaving a legacy entails passing assets on to a person or an organization that may use the money for many years after you’re gone. That likely means your investment strategy needs to account for your beneficiaries’ time horizons as well.

Start by looking at your own investment time horizon. You might consult some of the standard life-expectancy tables you find online. But if you’re healthy or have a family history of longevity, you could live far past these average projections. Therefore, for your own financial well-being, it may be prudent to plan for a longer time horizon to minimize the chance you’ll run out of money in retirement. After considering your own needs, your investment strategy can focus on your beneficiaries’ investment time horizons. If you plan to leave money to organizations or younger individuals, their investment time horizon likely extends decades beyond your own.

Adjust Your Asset Allocation and Withdrawals

Fisher Investments believes asset allocation—your portfolio’s mix of stocks, bonds, cash and other securities—is the single greatest contributing factor to portfolio returns over the long run.

If your long-term legacy goal is to leave as much money as possible to your beneficiaries, you may benefit from stocks’ historically higher long-term returns compared with bonds. Some investors consider a bond-based strategy “safer” than stocks during retirement; however, the opposite may be true for longer investment time horizons.

You may also need to consider withdrawing less from your investment accounts through your retirement if you need these accounts to grow into a more sizeable inheritance. Fisher Investments generally recommends withdrawals of no more than 5% of your total portfolio’s worth per year to remain sustainable, but you may need to withdraw less and rely more on Social Security, earned income, or reduced expenses in retirement to keep your assets sizeable enough to pass along.

Fisher Investments can help you determine your asset allocations and withdrawals to meet your needs and desires when it comes to passing your assets to loved ones or an organization.

Wills, Trusts and Other Options

Estate planning is more than just a will to be read after your funeral. A litany of options exists to help you optimize the allocation and timing of the assets you leave behind and want to pass on to your beneficiaries. A will is usually a good place to start, but there are other beneficial processes such as a living trust. These legal structures can help you protect and control your assets, giving you peace of mind that the process will go more smoothly after you're gone.

Will

A will is a legal document that allows you to name someone to manage your estate after you pass. This may be a good starting point in terms of allocating your assets following your death. You can include investment portfolios and accounts within this will as something to transfer.

Fisher Investments can help you determine your portfolio allocations and investment decisions if you want to maximize the funds available to allocate as an inheritance.

Living Trust

At their most basic, living trusts are legal agreements that designate someone to be responsible for managing your assets and establishing your beneficiaries. Trusts can be incredibly complicated, so most people hire lawyers dedicated to the field to draft their trust documents. This agreement may be the predecessor to a will, or it may also be used to designate a legal authority over your assets should you be unable to manage them yourself. Your investment accounts can also be included in this document.

Other Options

While the myriad of estate planning documents and legal forms can be overwhelming, the right option is probably out there for you. You may benefit from a charitable remainder unity trust (CRUT), investment accounts with specific beneficiary options, or another specific agreement. An estate planning professional can help guide you through your options to transfer these assets in whatever fashion you deem fit.

Investment Counseling for the Present and Future

Fisher Investments offers a level of client service purposefully designed to help meet your goals. As a Fisher Investments client, you will have a supportive Investment Counselor who knows your goals and situation—including your estate planning aspirations.

If you’d like, Fisher Investments can include your family and beneficiaries in these conversations. Our professionals can help you define your estate planning goals and work closely with your beneficiaries, attorneys, tax professionals, and estate planning specialist to ensure you get the proper care. We can also provide recommendations to specific industry professionals in your area.