This is the 4th and final article in the series on the stages of retirement planning. Next to the pre-retirement phase, this is, in my opinion, the next most important part. If you had done everything you needed to do in order to set yourself up for an enjoyable retirement before you retired, had a blast living out your dreams doing all of the things that you worked so hard to be able to do, took time to appreciate your family and friends while settling into a “normal” retirement life, then now is the time to think about your legacy. This stage is unique because this part of retirement, while still about you, begins to encompass more than just the self. This is where the culmination of all of your life’s work can live on beyond your life. Legacy planning is designed to have an impact on the world around you. Perhaps it’s for your children, grandchildren, or an organization that you are passionate about. Like the pre-retirement phase, legacy planning requires a lot of thought and help from others. Characteristics of legacy planning include:
- Planning, lots of planning. In order for your wishes about your legacy to come to fruition, you need to assemble a team of specialists to help you on that path. Your estate planning attorney, CPA, and Financial Planner all play a part in helping you realize your legacy. Getting all of your estate planning documents in order is crucial both for your wishes during your lifetime as well as after you’re gone. Failure to do this will almost certainly create unnecessary stress and hardship for your family. Before you can get all of these documents in order, you first have to think about the next item, which is-
- What do you want? This is a lot harder to answer than you might expect. You might be inclined to say, “I want my kids to get everything”, but there may be a need to dive a lot deeper than that. What are the logistics of your wishes? If you have 3 kids and 1 beach house, it’s unlikely that they can share it. People have busy lives with kids who also have busy lives. Saying they can “take turns” is a logistical nightmare if not impossible. I have 3 kids and 1 classic Corvette, and of course, they all want it. These are the types of questions that you need to consider in the planning process. Most importantly, don’t keep your wishes a secret! If something is important to you, then let your wishes be known to your heirs. This can help them carry out those wishes in the event that you can’t.
- Who gets what? One question I ask people in the estate planning process is “Do you want to treat your heir equally or fairly?’ At first pass, they might seem like the same thing, but they definitely are not. Family members in a business should get the business, not those who don’t work there. Those heirs can be compensated in other ways. Those who are an active and ongoing part of the family might be considered differently from those who are distant. The same goes for those with different financial resources. There are no wrong answers here, just things that you might want to consider.
- Health costs. This stage of retirement can, unfortunately, be one where healthcare costs can rise dramatically. Doctors, medicine, and, of course, long-term care can have a big impact on your standard of living at this stage of retirement. Planning for these potential expenses is crucial.
The legacy stage of retirement can be a wonderful time as it lets you reflect on a life well lived and all that has resulted from your life. Thinking about what you want and getting the planning process started for life beyond you brings peace of mind for both you and your family.
Frequently Asked Questions About Legacy Planning in Retirement
1. What is the legacy phase of retirement?
The legacy phase focuses on how your wealth, values, and life’s work will carry on beyond you—whether through family, charitable giving, or long-term impact.
2. What documents should I have in place for legacy planning?
Key documents include wills, trusts, powers of attorney, and healthcare directives. Working with a coordinated team (attorney, CPA, financial advisor) ensures your wishes are properly executed.
3. What’s the difference between treating heirs equally vs. fairly?
Equal means everyone receives the same share, while fair considers individual circumstances—such as involvement in a family business or differing financial needs.