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A letter to your heirs

By Judy Martel · Bankrate.com
Wednesday, October 6, 2010
Posted: 10 am ET

Leaving a legacy usually involves more than just figuring out how to divide up assets so the inheritors don't go to court. The best plans include letting your heirs know how you feel about wealth.

One way to do that is in a letter. In fact, you may not even share the letter with heirs, according to Anne Shumadine, founder of Signature Family Office in Norfolk, Va. It may just be a way for you to organize thoughts that you can communicate in another way.

"The biggest concern of all our clients is how to make sure their children will be good stewards of the money," says Shumadine. The concept behind what she calls a legacy letter is that it helps people organize their own thoughts and could become a guiding principal for how to communicate about money. "The letter is one part of a communication strategy," she says, "and communication is the issue."

Often, older generations want subsequent generations to understand how the wealth was made in the hopes that they'll appreciate it more. "The most successful people managing their wealth are the ones who communicated," she says.

Shumadine suggests writing the letter earlier rather than later. It doesn't have to be set in stone, and can always be revised, but the closer the creators of the wealth are to the event that brought them the money, the more they'll remember the values they want to preserve. She believes it's best done before setting up trusts or other wealth-transfer vehicles. "I think you have to figure out your beliefs and values and how you want to convey them to your kids before setting up trusts. It's just one more tool."

How do you plan to communicate to your heirs about your beliefs and values concerning money?

Read more about estate planning in our guide.

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