The Planning Pyramid

The foundation of the pyramid is financial independence. Until you have confidence that your plan provides sufficient resource to support you throughout your lifetime, on your terms, it’s difficult to progress beyond this level.

The next level is family legacy. Once you are confident about your financial independence, the next step is to consider why you want to create a family legacy. What values are you hoping to support and what outcomes would you like to promote? How much is enough to accomplish these important results? Simply “maximizing wealth to your heirs” and “minimizing taxes” are not real goals – these are means, not ends. The key question is – for what purpose?

The pinnacle of the pyramid is social capital legacy. Gifts to charitable causes or organizations need not come at the expense of your own financial needs or providing for your family. With the right kind of planning and expertise, you can usually redirect assets otherwise earmarked for taxes to personally chosen causes and organizations that will achieve the kind of social impact you hope to make. This is taking involuntary philanthropy and transforming it into voluntary philanthropy. Your redirected tax liabilities, along with additional wealth not required by you or your family, make up what we refer to as your “excess” wealth. Most people don’t know they have it, but they often do. If you knew you did, might you do some things differently? Live more? Give more?