There’s more to crafting a sensible estate plan than just deciding what assets you want to leave to your loved ones.
That’s a big part of the process, of course. But your estate plan might also include establishing a trust that safeguards your assets for beneficiaries. You might set up a charitable fund that benefits a favorite cause. You’ll need to file all your important documents in one easy-to-find spot. You’ll need to make decisions about how you want to be cared for at the end of your life. And you’ll need to coordinate with attorneys and tax experts.
I always encourage folks to work with a fiduciary advisor who can help quarterback these complex issues to make sure your estate is secured in accordance with your wishes. But there’s another, more personal side to your legacy.
Hopefully, as the years have gone by and you’ve transitioned into a successful and fulfilling retirement, you’ve come to appreciate what your money can and cannot buy. That’s why you might consider writing a Legacy Letter to help your heirs think about their own relationships to money in more meaningful ways.
What is a Legacy Letter?
A Legacy Letter is a way for you to share your values, life lessons, cherished memories, hopes for your family’s future, and anything else that is really important to you.
This isn’t a will, so you won’t be assigning any of your assets. And this isn’t a family history, although you might include things you learned from your own parents and grandparents that you want your heirs to be mindful of in their own lives. This is you, reflecting on a life well-lived, passing on everything you’ve accumulated that can’t be bought or sold.
One of the great things about this exercise is that your Legacy Letter can be whatever you want it to be. It could be a typed or hand-written letter. It could be an audio or video recording. It could even be a mix, such as a printed list of your most cherished values accompanied by an mp3 recording you dictated into your phone. Use whatever media makes it easiest for you to speak to your family in your own voice.
What will my heirs want to know?
Some folks look at their kids and grandkids, glued to their cell phones, and think, “My family won’t appreciate a letter like that, they just want the money.”
But eventually, your heirs are going to confront many of the same life and money challenges you may have faced. They may face the scary prospect of leaving an unfulfilling career. They may wonder how much support to their children is too much. They may be tempted to make a big-ticket purchase just to keep up with the Joneses.
Explaining how you did or didn’t stick to your values at these memorable moments will show your heirs that you can’t just throw money at life’s problems. Your Legacy Letter will ideally be a road map leading your family to better decisions and more fulfilling uses of their time and assets. And if your estate plan includes charitable giving, explaining why particular causes were important to you could inspire a tradition of giving in your family that does good for generations.
When should I write my Legacy Letter?
The golden rule of all estate planning is: don’t wait. If something unexpected happens to you or your spouse, it’s so important that you have a plan in place that protects you and your assets.
That applies to your Legacy Letter as well. Your values are arguably your most important asset. In years to come, this letter will be a source of comfort and inspiration to your family.
I understand that writing this letter might sound a little morbid, or like something you should do at the end of your life. But try to approach the exercise from a more positive angle. You’re not saying goodbye. You’re saying, “This is what I’ve learned. This is what’s important to me. These are the things that made my life fulfilling.”
Many clients have told me that writing this letter was almost therapeutic. It gave them a renewed sense of gratitude for all the little things in life that we can’t put a price tag on and inspired them to focus on those things throughout retirement.
You can also update your Legacy Letter as you age. Early in retirement, you might reflect on what work has meant to you, or the joys and challenges of marriage and raising a family. Once you’ve retired and start dedicating your time to your favorite hobbies and interests, you might want to encourage your heirs to make time for those passions to balance out their work commitments.
Watching your children and grandchildren grow, you could note your in-the-moment reactions to first steps, graduations, and weddings. These thoughts and feelings might not seem incredibly profound to you as you’re writing them down. But to your heirs, they will be priceless.
If you’re having trouble getting started with your own Legacy Letter, we’d be happy to help you jump-start the process. Your stories and your values are every bit as important to my Keen Wealth team as your money. Let’s do a thorough review of your legacy planning and reflect on some of the life lessons you might want to pass down. Together, we can help you secure all the things that are most important to you for the people you love the most.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
Keen Wealth Advisors is a Registered Investment Adviser. Nothing within this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Keen Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed here. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.