4 min read

Five Questions for Legacy Planning with Strategic Investments

What's the most high-impact way you could use your wealth to help the people and things you love most, even after you're gone? That's the core question at the heart of legacy planning. The term is sometimes used interchangeably with estate planning, but legacy planning better describes how many people approach this process today. 

Strategic investing can be a crucial part of successful legacy planning. First, maximizing your wealth through savvy investing gives you more money to pass on in the future. Second, some important estate planning work needs to be done around your investments. Taking care of it now ensures you get the final say over how your assets are used after your death.


Legacy planning is a holistic process combining traditional estate and financial planning. The decisions you make during legacy planning are all about using your wealth in the most effective and personally fulfilling ways. That includes anything from "What's the best way to divide my portfolio among my kids?" to "How can I use my assets to support the charities I love?" Legacy planning is an ongoing process because your financial goals and goals for your legacy may change over time. 


Work with your financial advisors to fine-tune your specific investment strategy and do any necessary legacy planning around those investments. As you do, these are some of the issues you may want to consider (in no particular order):

  1. Do you feel strongly about aligning your investments with your values? 

This strategy might not appeal if you're purely focused on maximizing returns. However, thinking about the legacy you want to leave might shape some of your investing decisions. For example, some individuals may want to invest in companies working on climate change solutions, improving healthcare, or doing some other type of work they support. 

Of course, many factors must be considered whenever you make changes to your portfolio, including risk tolerance and diversification strategy. Turn to your advisors for help identifying investments that align with your personal values and meet your larger financial goals. 

  • Does investing in real property make sense for your goals?

Again, this strategy isn't for everyone, but buying an investment property could help you achieve multiple legacy planning goals. Investing in property gives you something tangible to pass down to younger generations. For example, an investor who values family time might buy a vacation home with the plan to use it for annual family gatherings and rent it out the rest of the year. This investor gets to enjoy more family time during their life and use estate planning strategies to pass down the property to someone who will continue to host those treasured gatherings. Artwork, vehicles, instruments, jewelry and other real property can also be simultaneously sentimental and financially sound investments. 

  • What's the tax treatment around inherited investments?

A primary goal of legacy planning is to preserve as much of one's wealth as possible when transferring assets to one's heirs. There are a few tax issues to consider when passing on investments, in particular. 

First, there's the potential impact of your portfolio on your estate tax bill. Investments in your control at the time of your death are included within the value of your estate, which is the basis of the estate tax calculations. High-net-worth individuals need to consider strategies to move investments out of their name, thus reducing their future federal estate tax bill or potentially eliminating it altogether. Estate tax calculations are also important in states with estate taxes. (The Massachusetts estate tax is applied to any estate that exceeds $2 million.)

Then there's the question “What's the most tax-advantaged way for my beneficiaries to take control of any investments I leave them?”. Speak to your advisors about specifics. Many factors could be at play, including the type of investments you own and the tax laws in the states where your various heirs live.

  • Will you be gifting investments to charity?

Gifting stocks and other investments to groups you support is a generous way to guarantee your legacy lives on after your death. A qualified 501(c)(3) charity can sell your gifted assets without incurring capital gains taxes and use the cash to continue their work. 

Again, estate tax planning may be part of conversations with your advisors about gifting stocks and other investments. If there's a risk that your estate will be worth enough to trigger the estate tax, moving some investment assets out of your name now could be beneficial in the long term. That might mean using an irrevocable trust to hold those assets and arranging for them to be transferred to the recipient upon your death. Alternatively, you might want to make the gift while you're still alive to enjoy seeing how the organization uses it. (Remember that significant non-charitable gifts made during your lifetime may be added back into the value of your estate for estate tax calculation purposes.)

  • Do you want to pass on investment wisdom to the next generation?

Your financial legacy can be more than just dollars in your heirs' bank accounts. Consider ways to share what you've learned about investing and money management with the younger people in your life. For example, let's say you strongly believe in saving or investing over spending, and you're worried that some younger family members would make impulsive decisions with an inheritance. You might create a trust with conditions in place to control the distribution of your assets and include your reasoning for those controls in the trust document. Or, think about recording a video or writing out a list of your best financial advice and most significant financial mistakes to share with the young people in your life.


Sachetta's financial advisors work with clients at all stages of life to accomplish a wide range of tasks that fall under the umbrella of legacy planning. We're here to help you maximize your investment earnings, strategize about estate planning and create a financial legacy you can be proud of. Contact us today.


Jeffrey_AronJeff Aron manages all aspects of Financial Planning and client services, including the preparation of comprehensive financial plans (retirement, education, cash flow, etc.), insurance and asset allocation recommendations, advanced estate planning strategies and of course, plan implementation. He specializes in servicing the unique planning needs of high net worth individuals and families, with a depth of experience covering all aspects of financial and estate planning.