Simply Money

Simply Money

Each weeknight at 6pm, Simply Money makes money simple for you. Join hosts Amy Wagner and Steve Sprovach as they share easy-to-understand and...Full Bio


How to leave behind a lasting legacy

You’ve worked your entire life to plan and prepare for retirement, so wouldn’t it be nice to leave a legacy behind for your loved ones? But leaving a legacy to your children, grandchildren, or favorite charity, takes a lot of planning, dedication, consistency, and support.

So, if this is something you’re passionate about, here are a few ways you can leave a lasting legacy for your family:

Be clear about the family home and personal belongings 

It can be very traumatic for families to divvy up belongings after a death in the family. Emotions run high and it can cause conflict.

To save your family stress and confusion, you may want to create a list of items you want certain family members to have. Be as specific as possible. It would also be a good idea to decide what you would like to do with the family home after your passing. Make sure your will mentions this document.

The more specific you are, the easier it will be to execute your wishes. This will also leave your family feeling grateful for the items you decided to pass down since there will be less stress involved.

Clean out your home

After an unexpected passing, the last thing your family wants to do is clean out your home. As previously mentioned, having to sort through years of memories can be traumatic for any individual.

Make it easy on your family and start cleaning out your home now. Keep everything organized. Only keep the things you truly need or value. Years of clutter can become extremely overwhelming. If you do a little bit over time, you will make the transition a lot easier for your family.

Leave your IRA to your beneficiaries 

Another great way to leave a lasting legacy may be to name your children or grandchildren as beneficiaries on an IRA account.

Once the owner of an IRA account passes away, the remainder of the account will be transferred to the beneficiary(ies). The beneficiaries have five years to distribute the funds or they can transfer it to something called an “Inherited IRA.” Once it’s in an Inherited IRA, the beneficiaries have their entire life expectancy to receive the funds.

With a Roth IRA, the beneficiaries will not have to pay taxes on distributions as long as the account has been opened for five years.

Also, it’s important to keep in mind that you can name multiple beneficiaries on your account.

Donate retirement assets 

You can choose to donate assets from a retirement account such as an IRA, 401(k) 403(b). If you donate them as part of your estate plan, you could obtain some tax advantages. When done correctly, you could potentially lower the amount of obligatory income tax on your estate and heirs. Simply Money Advisors recommends working with a tax professional in order to establish the best tax strategy for your estate.

It is a win-win for you and the charity. The charity doesn’t get penalized by taxes and you can minimize taxes on your estate. 

The Simply Money Point

There are many ways you can leave a legacy to your friends, family, and causes you support. Simply Money Advisors recommends working with a financial planner (preferably a CERTIFIED FINANCIAL PLANNER™ or Chartered Financial Consultant®) and an estate planning attorney to help develop a financial plan that includes leaving a lasting legacy.

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