Legacy planning can be complex. I’ve been doing this work for 20 years, and I still learn new things each day. My team and I at Apex Legacy Consultants do everything we can to stay up-to-date on the latest legislation, the most current gift planning tools, and cultural and philanthropic changes that might impact how our clients should think about their legacy.
While we get very specific with donors and families in our Legacy Gift Planning Program, there are some high-level things that every person should think about. Here I’ve made a list of them, organized by decade, so you can be sure you’re not missing anything:
Estate/Legacy Planning Moves to Make in Your 20s
You might not think you have much at this point in your life! You might have school loans or owe money on your first car. You might be saving up to—hopefully—buy a home someday. Or you might just be inching along paycheck to paycheck while you get your career started. Estate planning might be the last thing on your mind, but here are a few smart moves you can make now that you’re officially an adult:
- Name a Power of Attorney for Healthcare: a person who will be able to make health-related decisions for you, should you be unable to make those decisions. This person should be listed in your Power of Attorney for Healthcare, even if it’s super basic, and you should let them know they’ve been named.
- Name a Durable Power of Attorney who will be able to take care of legal and financial matters on your behalf if you’re inaccessible or unable (say, you have a sudden car accident or have an emergency in a foreign country). You may remember from our previous post about estate-related acronyms and definitions that “durable” means that it survives incapacity. This could be the same person making your healthcare decisions, or they could be two different people.
- Name Beneficiaries on Your Accounts so that if anything should happen to you, your basic assets will transfer quickly and easily to your loved one(s) or favorite nonprofit organizations. Even if you have nothing else set up for a legacy plan, this is a great way to care for people that mean a lot to you…or to make a gift to an organization that’s made a difference in your life. Be sure to make this designation for any new accounts you might have set up through work, like basic life insurance or retirement funds.
Estate/Legacy Planning Moves to Make in your 30s
When I meet with clients in their 30s, “busy” is a word I hear often. Many are doing all they can to establish their careers or build businesses, get settled in homes, and start or build their families. Though legacy planning might still not seem urgent, my colleague Jess wrote an entire post about estate plan essentials for Millennials and Gen Z-ers! There’s a lot there, but if you’re in your 30s, here’s what I encourage you to tackle first:
- Review Your Existing Beneficiaries any time there’s a major life change, like a marriage, divorce, birth, or adoption. These designations don’t follow what’s written in a Will, so it’s very important to keep them current so your assets end up in the right hands if the unthinkable happens way too young
- Name Guardians for Kids (and Pets!) and be sure these are like-minded people who have the time, energy, and interest to take on such a long-term commitment on your behalf. Be sure they know they’ve been selected, so it won’t come as a surprise to them
- Get a Basic Will in Place to cover any major debts that will need to be paid, allocate major assets to the people or organizations you love, and name the individuals you want making important calls on your behalf. The peace of mind is worth the legal fees!
- Organize Your Accounts and Info so that your spouse, or another trusted individual, could take the reins if needed. Pull together URLs and passwords for bills that need to be paid, financial accounts, and even social media. Keep it somewhere safe, like a fireproof safe or lockbox in your home, or a safety deposit box at your bank.
Estate/Legacy Planning Moves to Make in your 40s
Middle age is when many people begin to think more seriously about having a legacy plan in place. At this point, you might have a more substantial estate. When we total up the value of your home, vehicle(s), retirement funds, bank accounts, life insurance death benefits, and other possessions, you might be surprised at your net worth! Your 40s are a great time to:
- Review Your Will and Beneficiaries to ensure there’s clarity about how you’d like to handle the distribution of any assets. Consider how your kids/heirs may use distributions, and put a plan in place to incorporate timed distributions, like through a Minor’s Trust or Special Needs Trust.
- Consider Life Insurance to Cover Funeral and Debts, to make things easier on your family if you die prematurely. An average funeral costs $10,000. And mortgage debt, for instance, must be settled before a home can change hands. Will your family have enough money to celebrate your life well and continue living in your home if you’re no longer around to contribute financially? Life insurance premiums are cheaper when you’re younger, and you “lock in” the same price for life.
Estate/Legacy Planning Moves to Make in your 50s
By now, you might have adult kids. You may have inherited, or plan on inheriting, money from your parents or grandparents. Your home is probably more established, and you might even have investment property or other new assets. The focus changes noticeably from career-building to finishing strong, investing in the next generation(s), and preparing for retirement. As we focus on legacy planning together, I often encourage clients in their 50s to:
- Think About Retirement Income, listing out all sources of income and exactly how much you expect from each. Make sure you’re on-track for paying off debt and building your retirement funds so that you can live the lifestyle you want to in retirement. Put a “date” on the calendar that you hope to retire, and work backward from there. Cover your essentials first, and then you’ll be free to think about making, and maximizing, gifts to your heirs or organizations you care about. There are many great financial advisors available to help you craft a plan that works best for you. Let us know if you need a recommendation!
- Review Your Will and Beneficiaries again. Am I starting to sound like a broken record? These documents should be reviewed every few years, or anytime a major life change happens. If your Will was written when your kids were young, does everything still fit for where your family has gone in life? Has your estate value changed significantly? Make sure the family cabin and Dad’s collection of antique boat motors are accounted for.
- Consider Long-Term Care Insurance while you’re healthy…and before you need it! If you start to have health concerns, you may no longer qualify for a policy. This could protect your assets from being liquidated if you end up needing to be admitted into a nursing/rehabilitation facility, or needing in-home care that can be extremely expensive.
Estate/Legacy Planning Moves to Make in your 60s
By your 60s, retirement is probably coming into clearer focus. Debt is usually less, and assets are a little higher. What gets really fun is when you feel financially stable enough to begin dreaming about trips you’d like to take, spending more time with kids and grandkids, and finding ways to instill your values in your loved ones.
- Review Retirement Goals and Projected Income – Will you have enough to do what you want to do in retirement? Or on the flip side, once your Required Minimum Distributions kick in at age 70.5, will you have too much?
- Consider Making Extra Charitable Gifts during your lifetime, or funding a Donor Advised Fund, to get a tax deduction and get to see organizations make use of your gifts.
- Consider Making a Larger Gift to your Kids/Heirs so you can see how they’ll use the extra funds. It may be very gratifying to see them pay down their mortgage, pay cash for college or weddings, or take their “dream trip”…they might even invite you along!
Estate/Legacy Planning Moves to Make in Your 70s/80s/90s/100s
It is so amazing to work with clients who’ve worked hard to build a beautiful life. There’s a certain wisdom that comes with age, and along with it, clients blow me away with their generosity and creativity. As they enjoy their later years, clients want to finish strong, provide for their families and loved ones, and also support causes they’ve believed in and supported for years. “Stay the course and dream big!” I tell them as we create legacy plans that do all of those things and more.
Here are a few things I encourage you to think about in your 70s, 80s, 90s and beyond:
- Consider Giving Through an IRA Rollover, especially if you don’t need your Required Minimum Distribution (RMD) to live on. You can make a Qualified Charitable Distribution (QCD) of pre-tax IRA funds to a nonprofit organization, so you’ll save the tax you would have paid on that income.
- Tell Your Story & Celebrate Loved Ones Consider sharing high-level estate intentions with your kids/heirs. Write them a heartfelt letter—something we often call a “Legacy Letter”—to share with them now or to keep with your legacy plan. We offer a number of written and video storytelling packages that can serve as a great complement to the “nuts and bolts” of your legacy plan.
- Inspire Heirs to Think About Their Own Legacy by setting up a family Donor Advised Fund, in life or through your estate, to get your kids/grandkids/heirs involved in being generous. Consider sending your loved ones a Legacy Kit to inspire legacy-related conversations that are both fun and meaningful.
- Keep Documents Current and Organized Are your beneficiaries and key estate individuals still able to carry out your wishes? Do your designations and amounts still fit, or should they be tweaked? If you need to make changes to your Will, work with your attorney to make that happen…you may unintentionally invalidate your legal documents if you write on them or try to make changes yourself! Use this handy checklist to pull together your important documents, and keep them somewhere safe where only your most trusted individuals will be able to find them.
Don’t Do it Alone!
Reach out if you need help, or schedule a 20-minute consultation to have one of our experienced legacy gift planning counselors give your plan a once-over. We’ll help you identify gaps or things to think about, even if you’re well on your way to having a comprehensive legacy plan.
About the Author: Jenny is a graduate of the Metropolitan State College of Denver’s Personal Financial Program, where she received her Certificate in Personal Financial Planning. She’s in her third decade advising nonprofits and educating donors on the best ways to maximize their legacy potential. When she’s not on the road visiting clients or hanging out with her granddaughter, you can find Jenny at the movies (with popcorn, extra butter), curled up with a suspense/crime novel, or enjoying a good glass of wine with those she loves.