The Elrod Firm

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Happy Independence Day

It probably comes as no surprise that I, an estate planning and elder law attorney who uses the tag line You Need a Plan, would love a story about the foresight shown by Benjamin Franklin in the preparation of his Last Will and Testament, especially right here at the Fourth of July. I recently read that, among many other bequests, this particularly charitable Founding Father left the equivalent of $4,444 to the cities of Boston and Philadelphia with very specific instructions as to how the funds were to be utilized over the next 200 years. Franklin directed that each city loan the money in small increments at a rate of 5.00% per year to entrepreneurs under the age of twenty-five to help them establish their trade.

This bequest is interesting to me for two reasons. First, it shows Franklin’s keen understanding of the time value of money and compounding interest. As Franklin anticipated, over the course of 200 years, his $4,444 grew to over $7,000,000 despite the low interest rate he directed that they collect on the loans. The lesson here is no mystery. When it comes to investing, start early and let your money work for you.

Second, it shows Franklin’s desire to invest in his community’s future. We know how much Franklin’s initial bequest grew just by checking the numbers, but it would be impossible to measure the true current value of Franklin’s idea when you consider that the money was used to help many young business owners get their dreams off the ground. Over the course of two centuries, the funds were used to provide more than 1,400 grants and impacted countless lives.

Although most of us don’t necessarily plan to impact thousands of people over the course of multiple centuries with our planning, it’s easy to see how a little planning can make a huge impact on whoever might be important to you, whether that’s your spouse, children, church, or a charity. A proper estate plan can carry out your wishes and continue to make a positive impact long after you’re gone. A lack of planning simply leaves a mess for someone else to clean up. Don’t leave a mess; leave a legacy.

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