You’ve worked hard to build your wealth. And when it’s time to pass your assets along to the next generation, or to use your wealth to support causes you cherish, you’ll want to leave a legacy that matters.

Whether you pass on those assets today or through your estate, your strategy should encompass the values and principles that guide your life. It should reflect your hopes and wishes for yourself and your family, as well as for other people and charitable causes you care about.

Build on your values

How do you build a “values-centred” estate plan? Here are three key considerations.

1. It’s about more than money. Many assets have sentimental as well as financial value. Of course, bank accounts, securities, and other cash-based items can be easy to distribute. But what about items of emotional value — your great-grandfather’s walking stick or antique furniture, for example?

Some sentimental items may also have considerable cash value, such as the family cottage. And while the emotional ties may be more important to one family member than another, the cash significance may be important to all.

The trick is to balance assets that have monetary value with those of sentimental value, and to ensure that each of your children receives a fair share of both types of assets. So, if you decide to leave the cottage to your child who uses it the most and is involved in its upkeep, be sure to balance the cottage bequest with adequate financial compensation for the others.

And don’t forget to make provisions for capital gains taxes that arise when property is transferred (an especially thorny issue for vacation properties that have greatly appreciated in value). A life insurance policy can provide cash to meet those tax obligations.

2. Target assets for specific purposes. For example, your Will can earmark cash for charities registered with the Canada Revenue Agency that reflect your values. You can do the same for the proceeds of a life insurance policy, real estate, or even works of art.

Again, tax considerations are important. The right strategy can enhance the after-tax value of your gift. When you donate eligible publicly traded securities to a charity, capital gains are not taxable and you receive a charitable tax receipt for the full amount of the donation.

Another way to give to your favourite charities is to establish a foundation in your name. You can structure donations so they help your favourite charities well into the future, and at the same time enjoy significant tax savings.

3. Make it a family plan. Be sure to discuss your estate and wealth distribution plans with family members. This will help you identify important issues, such as which assets have sentimental value and to whom. It will also help establish an estate plan that is fair to all your heirs.

Once you’ve finalized a strategy, communicate it to your family. And explain your charitable giving strategy and why it’s important to you. This can help avoid family squabbles and potential legal issues.

Financial and estate planning advice can guide you with the expertise to begin or continue planning a legacy that reflects your life’s goals and wishes.