Let’s begin today’s post with a question:
If someone were writing the story of your life, what would be the theme?
A story’s theme details the message and heart of the work—essentially, what it’s all about.
Looking deeply at your life, what do you hope your “theme” would be (love, generosity, strength, tenacity, etc.)? How do your thoughts, actions, and words embody this theme?
Your legacy is like the story of your life—not only the pages you leave behind but the words you craft every single day.
Too often, legacy planning conversations are siloed only to the realm of estate planning, but its influence far surpasses the tangible items you leave behind. Your legacy, what people will remember, embodies the richness and fullness of your life.
This sentiment calls to mind a famous quote by Maya Angelou,
“At the end of the day, people won’t remember what you said or did; they will remember how you made them feel.”
How can you begin intentionally creating your legacy today?
What Does “Legacy” Mean To You?
Before you can craft a legacy plan authentic to you, it’s essential to think about what leaving a legacy truly means to you.
A definition that’s always inspired us comes from author Ron Blue in his book Splitting Heirs. His Wisdom Principle evokes a simple yet powerful message:
Never pass wealth without passing wisdom first.
This idea shows that the value you bring to yourself, your loved ones, and the world is far more important than the money that comes with it. We were so inspired by Ron’s book that we wrote a series about increasing the value of your estate beyond your finances. Check it out if you’re interested!
Now, shift your attention to your legacy. What does it look like? Consider the following:
- How do you hope to make people feel when they encounter you?
- What are your core values and beliefs, and how does your life support them?
- Do you hope to pass down specific outlooks, perspectives, experiences, and beliefs?
- Would you like to leave your children or grandchildren an inheritance (no matter the size)?
- Do you want to use some assets to support a cause or organization that’s been fundamental throughout your life?
- Are there family heirlooms you’d like to give to loved ones?
- What experiences do you hope to have with your family and friends?
Consider a Legacy Notebook
A legacy notebook is an opportunity for you to think critically about your legacy and write down your goals. In addition to the questions above, you may want to write about the following:
- Acknowledgment. Who are you writing this for, and why is it essential for you to share?
- Core values. Make a list of your core life values (family, religion, giving, etc.) and how they became a mainstay in your life.
- Top lessons learned. You learn lessons every day–in every one of your experiences, both good and bad. What were the most important lessons that shaped your life? Perhaps it’s something you learned in your career, relationships, health and wellness, etc. Think deeply about the lessons that left their mark.
- Hopes for the future. What do you want out of tomorrow? While that may seem like a silly question, the goal is to get you in the mindset of your ideal life.
- Expressions of love, gratitude, and appreciation. What moments in your life have you felt these three powerful emotions? Write them down, including the people who helped bring them to life.
- Favorite memories. What moments do you always come back to? Perhaps it’s traditions, books, movies, songs, quotes, places, experiences, and more.
- Contribution. What do you want to be remembered for? Maybe it’s your cheery smile, caring nature, etc.
Once you have a loose idea of the things you’d like to accomplish, you can start to think about ways to implement those ideas into your life today.
Creating a rich and meaningful legacy isn’t something that happens when you’re gone; it’s something you purposefully build every day.
We think it’s essential to make the most of every experience and opportunity to bring as much fulfillment to your life as possible. So that may mean re-thinking the way you look at your legacy. Here are three ways to keep your legacy plan alive and well today.
Re-frame How You View an Inheritance
Parents often think they need to leave their children an inheritance. But that’s just not always the case. You’ve worked hard to support and care for your children throughout their lives, now is the time to take care of yourself and fund your retirement goals and aspirations. Trust us, your kids would likely agree.
What does this mean for your legacy?
Perhaps you’ll prioritize giving more throughout your life. Instead of an inheritance, maybe you’ll help your child with one of their goals like a wedding, down payment on a house, etc. Think about it like this, wouldn’t it be more fulfilling to help your child now and watch them enjoy the gifts today rather than when you’re gone?
If you help your child with a house, for example, you could be over for family dinners, holiday celebrations, birthday parties, and more. The gift you give today sets the stage for meaningful memories both now and in the future.
The same idea is true for heirlooms. While you could leave your first edition books to your grandson after you pass, you could see them in his apartment, share thoughts on your favorites, and create an even deeper bond if you give them to him now.
If you plan to give your loved ones money or assets while alive, be sure to consider the gift tax rules. Presently, you can give up to $15,000 per individual per year ($30,000 married couple). Some gifts, like direct payments to higher education institutions or medical facilities, are exempt from this rule.
Prioritize Priceless Experiences
Experiences are often far more rewarding than items or things, and they tend to make people happier.
People are fascinated by the connection between money and happiness, so much so that several researchers in various fields have conducted studies to try and explain their relationship.
According to the “Science of Happiness,” experiences bring more happiness than things/objects. Why? Experiences are ephemeral—they don’t last. Studies have shown that it’s difficult to maintain happiness with “things” long-term because they’re easy to get used to.
These researchers also discovered that people who make experiences out of their purchases tend to be happier. A fabulous example cited in the research is a book. A book sitting idle on the shelf is a thing. A book where you’re engrossed by every word, character, and plot twist is an experience.
This data also highlighted that dedicating time and energy toward reaching a goal can also make you happier. It’s healthy for you to stretch yourself, test your limits, and try new things. That’s one reason why having goals is so critical—they give you purpose and something to work towards.
How can this idea impact your legacy?
Perhaps you’ll want to have an annual family vacation, plan a weekend away with just your grandchildren, or have regular get-togethers with your friends (book club, dinner parties, game night, etc.).
Maintain Charitable Efforts
Charitable giving plays a significant role in many people’s retirement plans. There are various ways to support causes that mean a lot to you:
- Financial donations
- Giving your time through volunteering
- Serving on the board of organizations and foundations
- Donate your professional skills, like marketing, grant writing, accounting/finance, promoting and planning events, etc.
- Donate supplies or other items like food, clothes, toys, furniture, and more
- Alert your network (family, friends, etc.) to charitable events and invite them to attend or volunteer with you
As you can start to see, charitable engagement is far more than the dollars and cents you may or may not write off on your taxes. It’s a wonderful way to bring meaning and value to your life and the lives of others.
If charitable giving is an important component of your legacy plan, consider giving more throughout your life via money, time, resources, and other forms of support. You can also work with your estate planning attorney to ensure that some of your assets go toward a charity or cause that’s meant a lot to you over the years, whether that’s an investment account, trust, or another vehicle.
A few tremendous charitable giving strategies for retirees to consider today are:
- Create a family foundation. Family foundations are flexible giving vehicles that offer you and your family the opportunity to further your charitable legacy. By establishing a foundation, you can enjoy tax benefits and deeply involve your family in philanthropy. With a foundation, you have the freedom and flexibility to pursue the charitable avenues that mean the most to you. Plus, contrary to popular belief, you don’t need millions of dollars to make the most out of it. We often work with this company to help clients set up their foundations—check it out!
- Qualified charitable distributions (QCDs). QCDs allow you to donate to qualified charities via your traditional IRA. Many retirees find it financially beneficial to donate some of their annual RMDs to charity, saving them a bit on taxes and maximizing their charitable gifts.
- Donor-advised funds (DAFs). Think about DAFs like charitable investment accounts. You can donate cash, appreciated assets, collectibles, and other assets, receive an immediate tax deduction, then recommend grants from the account to the charities of your choice. DAFs are an excellent way to engage your family in your charitable efforts. Each year, you as a family can decide where you want to give the money. Perhaps each year, a different family member gets to select an organization they’re passionate about. This type of “tradition” instills charitable values in your family.
- Donate consistently throughout the year. Regular charitable contributions allow you to continually support the organizations you care about. Secondarily, it’s also beneficial for tax efficiency.
Your retirement consists of two distinct yet complementary parts: financial and personal. At TFS, we don’t solely focus on your financial “needs,” we’re also deeply attuned to your financial “wants.” What do you want to do with your money? What story can your financial habits tell about your goals and values?
We seek to help you create a plan that inspires you today, tomorrow, and well into the future.
Work With A Trusted Team
We’re passionate about helping our clients use their money to bring meaning, purpose, and fulfillment to their lives. Doing so may mean re-thinking the way you want to allocate your funds. You’ve worked so hard throughout your life, now is the time to reap the rewards.
Remember, your legacy isn’t about how much money you leave to your kids or the heirlooms you leave behind. It’s the feeling you create every single time someone encounters you, whether in person or in memory. We would love to help you use your money to support your legacy goals. Let’s talk about them more together.