#73 – Living With Purpose- Revisiting Legacies and Estate Planning

It’s been three plus weeks since the last post. Two trips kept me away from the blog, but also gave me plenty to write about later. The travel log can wait another week…actually a couple weeks as it’s dawned on me that this post will likely be multiple parts.

I’m combining content from previous posts titled Estate Planning (Post 39 from April 2022) and to a lesser degree, Leaving a Legacy (Post 63 from January 2023) and Trusts (Post 12 from March 2021). This may add continuity to the subjects and provide a broader perspective than the individual posts themselves.

Does it make sense to approach this retired life period with purpose? Most applicable references and social media communities clearly think so. If a couple has the time and resources, it may come naturally to plan these 20-40 years living with specific accomplishments/objectives in mind, while managing the estate along the way and ultimately relinquishing the estate in the manner they desire.

Or maybe it doesn’t come naturally.

If you’re approaching retired life, you’ll soon turn on Social Security (if you haven’t already), hit the starting age for Required Minimum Distributions (RMDs, discussed in an earlier post), your retirement nest egg will likely grow considerably- and you’ll want to minimize your annual tax bill as it does- your children will be moving towards retirement age, grandchildren will finish school and turn into adults, your travel opportunities will diminish, your medical needs will increase….then one day someone will be distributing your assets, hopefully to the people or organizations of your choice, and hopefully with a minimum going to the government via estate taxes. All these life events will have a progressive impact on how you live, and how your estate changes during/after your time on this earth. Taking the time to read “broadly” on estate planning and leaving legacies can help shape your thoughts on how to approach this great time of life.

If you haven’t already, consider making a plan- with objectives- for how you’ll live and use your resources during this time of life and beyond. Are there some specific objectives you want to accomplish over the next 20 plus years? You’ve likely heard the phrase “the purpose-driven life” and Rick Warren’s Christian faith-based book of the same title. Try a search for “retired life with purpose” and see what comes up. Or start by checking out the following reference to expand your thoughts on the subject:

“To make this world a better place” always sounded a little too general a goal to me.

I’m not trying to describe a step-by-step recipe to find your way to a fulfilling retired life. But I am encouraging an approach to opening one’s mind to retired life’s possibilities. For some of us that means researching through a variety of sources to get creative thoughts to the surface. I’m still searching for our “purpose”, the associated objectives, and the means to get there.

There will be more on living with purpose in the next post. For now I want to challenge you to simultaneously think about that while also considering estate planning.

You and your spouse may already have a will, and that’s a good start. If you haven’t reviewed it in the last five years, you might want to do that first, and look at least another five years into the future before making any updates. Most estate planning professionals will also advise couples to include specific powers-of-attorney, a living will, and (a paper copy along with an electronic copy of) a list of your assets and debts. Your surviving family members and estate executor/administrator will be extremely grateful to you for having these done in your lifetime.

There are numerous easy-to-understand estate planning resources online and in book form. Look for resources that can provide insight into your state’s approach to estate planning. The following common sense considerations can be found among various sources, and this is by no means a complete list. But it will get you going in the right direction:

  • Make an inventory of your financial assets (including POCs, locations, phone numbers and account numbers) and tangible assets (jewelry, collections, watercraft, cars, tool sets, etc.). Don’t forget life insurance policies.
  • Check your assigned beneficiaries for each financial account/policy to make sure the listed beneficiaries are still the individuals/organizations you want the assets to pass to. This list might evolve as you set off on a specific purpose-driven retired life.
  • Make a list of all your debts (loan POCs, account numbers, phone numbers, etc.).
  • Make a list of organization memberships you have (some include valuable benefits such as life insurance, etc.).

You may be surprised to see what your net worth (total assets minus debts) adds up to. At this point, consider going to an estate planner certified in your state. This individual will know laws applicable to asset transfer situations and will be able to advise you on what options are available to minimize taxes- along the retirement journey as well as at life’s end- and specify ways to ensure your desired asset transfer intentions are met, facilitate administrative processes on your estate in your lifetime (and your spouse’s), etc. This individual will also be able to help you execute any steps you choose to take, as well as help you select the right person to be your estate’s executor/administrator.

If you choose this individual to help you execute any of the estate planning steps you select (wills, trusts, Powers-of-Attorney, living wills, etc.), it will cost roughly $500 – $5000, but will likely save so much more than that from going to the government or to pay legal bills stemming from the distribution of your estate.

Depending on how much research you conduct, and if your estate planning steps are relatively simple, you may be able to execute the action items yourself, but I certainly don’t recommend it- these are clearly areas of expertise where “you don’t know what you don’t know.”

If you’ve gotten this far and are still reading with interest, then you may want to spend some time looking at trust options. They can be extremely effective in saving taxes on your estate during asset transfers, as well as maintaining control of those transfer details long after you and your spouse have passed on. You don’t have to have assets in the millions of $$$ to benefit from using a trust. I’m still thinking through my options.