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Strategies for developing a financial legacy as an attorney

For most attorneys, a life well-spent also encompasses generating a legacy during their lifetime and beyond

Mark Candler //March 16, 2021//

Strategies for developing a financial legacy as an attorney

For most attorneys, a life well-spent also encompasses generating a legacy during their lifetime and beyond

Mark Candler //March 16, 2021//

No matter the size of your family or fortune, you must intentionally build a financial legacy. Practical financial legacies are built by determining your financial goals and then focusing on each one individually.

What Are Your Goals?

With goal-based planning, you can balance several different financial goals, breaking them down into manageable action items. No matter what type of law you practice, you know that cookie-cutter plans rarely work for your clients. The same applies to developing a strategic financial legacy.

Far too often, attorneys focus only on one goal or what everyone else’s plan is, for example, retiring comfortably. Then, when they attempt to carve out what they require to fund their other plans, they end up subtracting from their fixed goal and merely hoping for the best.

Essential Goals

Your essential goals are the ones that must receive funding no matter what, such as healthcare and shelter. They protect you against financial uncertainties. If you can’t meet and fund your essential goals, it will be impossible to build a lasting legacy.

Important Goals

Providing for basic needs and expenses is necessary, but most people don’t want to stop there. You have goals that are personal and important, depending on your temperament and tastes. Perhaps you want to start your own practice, ensure your children receive excellent educational opportunities, or travel and enjoy the finer things that life has to offer. Maybe you want a larger home or a vacation home.

If you invest effectively, the greater the chances are that you will achieve and exceed these goals. You need to determine the balance you desire to strike between protecting the lifestyle you’re already living and assuming additional market risks as you seek greater wealth for your important goals.

Gratitude and Giving Goals

For most attorneys, a life well-spent also encompasses generating a legacy during their lifetime and beyond. Developing and accomplishing family, community, charitable, philanthropic goals requires precise financial logistics, including:

Don’t overlook personal logistics either. You should identify your legacy goals and prepare your heirs for their future roles in extending your legacy.

Creating a Generational Wealth Plan

Leaving generational wealth requires that you attain assets or save money you won’t spend during your retirement. Unless you inherited generational wealth, this process can be slow. However, if you are financially strategic, it’s attainable. Consider the following strategies to building generational wealth:

Consider a Money Market Account

If you have a savings account that you don’t usually access, consider putting those funds into a money market account to accelerate interest growth. Your money won’t accrue as fast as if it were invested; however, you won’t risk losing it like you could in the stock market.

Invest in Stocks

Stocks are one of the best ways to develop long-term and generational wealth. Your initial investment goal should focus on capital appreciation while you set aside more money, allowing the value to grow. As you age and don’t want to take as many risks, you can move to a capital preservation strategy. Transferable stock options can be a great choice as the optionee can transfer them to:

  • A family member
  • A trust
  • A limited partnership
  • Another entity for the benefit of family members
  • A charity

Invest in Real Estate

Real estate can produce income in several different ways. If someone inherits an investment property, there’s the potential for ongoing cash flows in the form of rental incomes, tax advantages, and other benefits.

While prices fluctuate, homes have consistently increased in value over time. If your offspring decide they don’t want to keep the property, they should be able to sell it for more than your initial investment.

Save Strategically

Wealth isn’t just the result of making money; it’s also from saving. As you collect distributions from all income sources, save what you can in a place where it will continue to grow. Ideally, in tax-advantaged accounts first.

Set Up a Trust

A trust can consist of cash, stock, real estate, or other valuable assets. You determine the beneficiaries and set the stipulations. For example, you might elect that beneficiaries receive a monthly payment and only use the funds for educational expenses, injury or disability expenses, or purchase a home.

Enlist the Help of a Financial Planning Group

Generational wealth and the steps necessary to build it can be complex. It’s not a task that many attempt to take on by themselves. Even if you are a trust and estate lawyer, it’s still essential to have support and knowledge from a financial planning group. When you work with an experienced financial planning group, rest assured you will understand all of your options and take steps to meet your generational wealth goals.

Mark Candler and Dave Owens of Maia Wealth are go-to wealth advisers for lawyers and law firms in Colorado. Specializing in debt reduction, investment management, retirement efficiency, and legacy planning, Mark Candler and Dave Owens are trusted professionals for attorney-focused wealth management strategies in the Denver metro area.