What’s your Family Financial Philosophy?

What’s your Family Financial Philosophy?

Some of the most important events and decisions in life can be incredibly joyful and terrifying at the same time, such as having a child, buying a home and starting a business. Deciding how to use your wealth to build a legacy – both during and beyond your lifetime – often falls into this category as well.

You’ve worked hard to achieve financial independence and reach the point of not needing to worry about where your next dollar is coming from, yet tackling the question of how best to put your money to use can be daunting. However, inaction is not a reasonable strategy.

To secure your legacy and ensure the spirit of all you’ve worked for lives on, you need to give meaning to your wealth.

 

Giving purpose to your surplus wealth

So here you are, with wealth beyond your immediate needs. For those with a clear plan for how to use their wealth, this is considered good fortune. For others, grappling with uncertainty and worrying that their family may plunge into conflict after they’re gone can become a burden. Whatever path led you to this point – a stellar career, entrepreneurial success or prosperous forebears – you ultimately have only two choices for this wealth when you die: you can spend it or give it away.

From wills to trusts to insurance, your estate plan covers all the practical considerations required to ensure that your wealth is disbursed and put to use according to your wishes upon your death. These are the mechanisms that will allow you to pass on a family cottage, leave behind money for future generations or direct financial support towards important causes. In other words, your estate plan covers the ‘how.’

But what about the ‘why’?

Building a legacy with meaning

For those who have achieved financial independence, wealth management takes on a deeper meaning. When you die, your prosperity has the potential to brighten the lives of family members, friends, and strangers. However, it also has the potential to result in chaos. We’ve all heard the cautionary tales about families that end up fighting in court, or children and grandchildren going off the rails when access to wealth is not balanced with responsibility and good judgment.

While the estate planning process puts in place the mechanisms to tell your family how your assets should be distributed, it doesn’t address the ‘why.’ To do that, you need to dig deeper to understand and articulate the purpose that you want to drive your legacy.

We call this your family financial philosophy

Putting your motivations, ambitions and inspirations into words can help your family avoid uncertainty after you’re gone. By helping them understand the thinking behind the distribution of your wealth, you can also reduce the risk of family conflict and increase the likelihood that future generations will build on your legacy in a positive way.

 

Working with a trusted guide

Giving shape to your family financial philosophy takes honesty and introspection. This starts with asking the right questions and considering all the possibilities before you.

Whose lives do you want to touch? What causes do you want to support? Why are these things meaningful to you? What are your hopes for those who will build on what you leave behind?

At Rubach Wealth, we can guide you through this process, ensuring that you have the information and clarity needed to plan your legacy and articulate your philosophy. You can’t explain these things to your family unless you put them into words before you’re gone, so let’s sit down now to give clear meaning to your wealth.

 

Family Legacy Case Example

Asking the big questions to focus on the big picture

Asking the big questions to focus on the big picture

 

A new year has begun, and just like every year, 2018 will have its share of ups, downs and surprises. When it comes to managing your wealth, the focus is often on long-term planning to protect against short-term blips and keep you moving forward toward your goal.

But what is your goal? Is it to retire with a certain amount of money in the bank? Is it to ensure financial security for your children and grandchildren, so that they will never have to worry about money after you’re gone? Or is it to leave a mark on your community or the world?

Tax-efficient strategies for growing and preserving your wealth are an integral component of sound wealth management, but they are only a means to an end. If the management of your wealth is not guided by your values, you may one day find yourself with piles of money and no idea what to do with it.

That’s why it is crucial for your wealth planning to be driven by big-picture goals tied to your values. And to gain clarity on these goals, you need to start by asking the big questions. For example: when it comes down to it, what does wealth and money actually mean to you?

Understanding what drives you

People spend much of their life directing time and energy toward their career or business. For many, this is simply a matter of survival, but this motivation is less applicable for high achievers who are already able to meet their immediate financial needs.

To reveal what truly drives you, you need to dig deeper. This involves thinking about not only what you want to do, but also why you want to do it.

Perhaps you want to build wealth that you can pass on to your children, but what are your underlying motivations and concerns? Do you want to give them the resources to achieve incredible things in life, or are you worried that they may lack the capacity to support themselves once you’re gone? On the other hand, maybe you are grappling with how best to provide them with a comfortable life without leading them down a path toward excessive privilege or entitlement.

Alternatively, you may be motivated to build your wealth so that you can share it with others through philanthropy. Yet even here, it is important to look deeper. Is your goal simply to give as much as possible and help as many people as you can? Or do you view philanthropic giving as an opportunity to become actively involved in tackling social issues and guiding social development in a hands-on capacity?

These questions are not always obvious and the answers are not always clear, but pursuing them will lead to greater alignment between your goals and your values.

 

Guided by values

Your decisions and actions today will influence what happens 10, 20 or 40 years from now. To avoid reaching the finish line and looking around to see where you’ve arrived, you need to create a roadmap for where you want to go.

At Rubach Wealth, one of our key roles is to act as a sounding board for our clients as they develop this roadmap. As you uncover and make sense of your core motivations, we can work with you to translate these into meaningful, overarching goals that will frame our relationship.

We can’t predict what 2018 will throw your way, but we can help you identify any gaps in your plan and take advantage of any opportunities that pop up. More importantly, we can help you maintain your focus on the big picture and chart a course forward that is guided by the values closest to your heart.

Women embracing philanthropy with financial planning

Women embracing philanthropy with financial planning

There is good in all of us. Particularly in Canada, we all make an effort to help those in need, whether it’s making donations, attending fundraisers or volunteering with a community group. While many of us long to do more, taking greater action to tackle the struggles, injustice and suffering in the world can be daunting if you don’t have a plan.

Our research shows that many women face obstacles when it comes to engaging directly in philanthropy on a larger scale. Overall, the most frequent explanation for philanthropic absenteeism is lack of time and clarity. In addition, some feel that their family’s philanthropic endeavours have been taken care of by their partners. Some are pushed into or accept minor positions even though they have the skills, know-how and resources to take on a leading role. Some simply dislike the spotlight and prefer not to have their names recognized when cutting a large cheque. Meanwhile, most of those who donate do so without any rhyme or reason.

These are all legitimate concerns, but that doesn’t mean you should let them stand in your way. If you are fortunate to be in a position to make a greater impact through philanthropy, we say it’s time to break down the barriers and create a plan to make it happen.

Overcoming the obstacles

There are many questions and concerns that may be stopping you from taking significant philanthropic action. However, with answers to your questions and guidance to help you move forward, there is no reason for these worries to hold you back.

Here are some common worries that keep women from fulfilling their philanthropic objectives, along with insights on how to move past them:

Lack of time.

When you are a multitasker trying to wear countless hats, time can be your greatest enemy. You may have a strong desire to support a particular cause, along with ideas and money to make it happen, but where are you supposed to find the time to research, plan and engage in yet another initiative? For one thing, you can seek out help from a financial advisor or others to take on some of the work of turning your philanthropic objectives into reality.

Fear of over-committing.

Committing a significant amount of your time or money to philanthropy can be scary when there is uncertainty surrounding markets, careers or family dynamics. All of these factors can introduce an element of perceived financial instability. However, with sound planning, trusted advice and flexible safety mechanisms in place, it is possible to make a major philanthropic gift while ensuring that your family’s financial needs will always be well looked after.

Overwhelming choice, not enough clarity.

With the myriad of pleas to end poverty, protect the environment, care for animals, cure diseases and end wars, how are you supposed to decide where to direct your resources? One place to start is by considering where you can have the greatest impact. Perhaps you have existing connections in a particular field or ideas for an innovative approach to tackling an existing challenge. Talking things through with trusted friends or advisors may also help to narrow your focus and reveal a clear path forward.

Concerns about where the money goes.

If you are going to make a major financial contribution to a cause, you want to be sure that your money will be put to good use rather than disappearing into an organization’s expensive bureaucracy. It might take extra effort, but researching expense ratios and seeking assurances about how your money would be spent are an important part of the philanthropy due diligence process. While large organizations may have more bureaucracy than small charities, they may also have a greater impact due to their wider reach.

A desire to see the impact first-hand.

When people are hurting or in need, there is understandably a desire to help right now. It can be difficult to focus on long-term outcomes when people are going hungry before your eyes. Philanthropy at its best is about addressing these urgent cries for help as quickly as possible, but doing so in a sustainable manner. With a hybrid solution, you can take heart in immediate results while also working toward long-term solutions. This will have a much greater impact in the long run compared to short-term efforts that focus solely on fighting fires here and now.

Finding the right fit

So what does a good philanthropic initiative look like? It depends on what you are looking for. As a unique individual, your ideal way to engage in philanthropy may not be the same as anyone else’s.

You may already have found a cause or organization that you are passionate about, and you may already be donating to that cause. This is a good start. If you are going to be directing a significant amount of your time, energy or money toward philanthropy and supporting this cause, the following are some important considerations:

  • The cause should be something that you find personally meaningful and compelling.
  • You should have a clear understanding of the mission and impact of any organization you support before giving to ensure there is a good cultural fit.
  • You need to have a plan, and what, how and when you give needs to fit this plan to ensure that it is financially sustainable and optimized from a tax perspective.

The leap from ‘planning to give’ to a Giving Plan

Successful philanthropy does not happen by accident – it starts with a plan. Your focus is on helping others, and at Rubach Wealth we want to help you navigate the giving process with confidence and a financially sound plan to maximize the impact of your efforts.

Aside from bringing about meaningful change, philanthropic giving also has many tax advantages for donors. When thoughtfully integrated into your estate plan, philanthropy enables you to have a significant positive impact in areas that are close to your heart while at the same time taking advantage of beneficial tax structures.

Our team at Rubach Wealth designs flexible giving plans that evolve together with your financial situation and preferences. Your philanthropic objectives and capacity may change over time; with a good plan, changing beneficiaries and how much you give will not be an issue.

There are many obstacles that can make women hesitate to embrace philanthropy, but there are even more incredible reasons for seizing the opportunity to make the world a better place. If you’d like to learn more about how we can help you throughout this process, we invite you to get in touch. You have the potential to do so much good, and with a plan tailored to your needs and objectives, you can make a real difference.

 

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Have you thought about your legacy?

Have you thought about your legacy?

 

Go ahead and celebrate it: you’re a successful woman! Your hard work and good fortune enable you to start thinking about giving back to your community, so now the big question is how to go about doing this. When you reach the point of sharing your wealth, it takes on greater meaning and allows you to build a legacy. You have the potential to enrich the lives of others and do something special for your community, your country or beyond.

Your legacy could come about by accident, but if you want to have a great impact on your terms, you need a plan.

Make it personal

Planning a legacy means deciding what will happen to your wealth beyond your use of it.

So what do you stand for? What causes are you passionate about? Children’s health or education? Environmental protection? Other women? Literacy?

You may find yourself overwhelmed by the options, so here are a few things to consider when you’re choosing where to direct your money:

  • Do your core values align with a specific cause or organization?
  • Are you or someone you care about personally affected by an issue?
  • Is there a cause you think needs more attention?
  • Are there organizations you already support that you’d like to do more for?

If you plan to play a role in supporting a specific cause – whether through active engagement or behind-the-scenes patronage – you’re far more likely to make a significant impact if it’s an issue you feel strongly about. In addition, the results of your efforts will be more personally rewarding when you make a difference in an area that’s close to your heart.

Create a lasting impact

One-off donations to charitable causes are valued by their recipients and can be extremely helpful. However, once they’re given and received, that’s it.

If you prefer to create a legacy that will touch the lives of others for years or even generations to come, there are alternatives. With the right planning and financial tools, you can set up a scholarship, fund an annual research grant or even establish your own charity to brighten countless lives.

Another way to expand and extend your impact is to collaborate with others to direct your joint resources, networks and passions into driving an initiative forward. Could you strengthen your legacy by drawing in your family and friends to join the cause? Or is there perhaps an organization you could partner with to match your gift? Imagine if you started a movement! Don’t be afraid to think outside the box – the sky’s the limit when it comes to your charitable legacy.

Seek out guidance

As we already know, being a strong and independent woman doesn’t mean you have to face every journey alone. When it comes to planning your legacy, a financial expert in charitable giving can serve as a sounding board and provide valuable advice.

For example, a financial advisor can help you build your legacy in the following ways:

  • Align your philanthropic plans with the core values and issues that matter most to you and your family
  • Identify a plan to involve your family – today and in the future
  • Take advantage of tax efficiencies and benefits to maximize the impact of your legacy

Families and organizations are strongest when the people within them work together as a team. The same is true for your efforts to create a meaningful legacy – you can boost your potential for success by working with a trusted partner or team that understands your thinking, challenges, goals and attitudes toward giving back.

Build your legacy

If you would like to explore opportunities to build your legacy but don’t know where to start, we would love to guide you on this journey. Even if you are just curious about what this all means, please contact us to start a conversation.

Download our Women & Legacy overview for further insights on this important topic.

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