This article appears in May-June Family magazine.
“The great use of life is to spend it for something that will outlast it,” said philosopher and psychologist William James. What will your legacy be?
That’s a consideration facing the nearly half of all Americans 55 and older who do not have a will, according to a new study by Merrill Lynch conducted in partnership with Age Wave.
“A well-prepared legacy not only ensures your preferences are being met, it can be one of the greatest gifts we leave to those we love,” said Kevin Hindman, national trust executive at Bank of America. “Being prepared gives you the simple and satisfying peace of mind of knowing that you’ve done what you can to organize your life, shape your legacy and leave your family with a road map of your preferences. Initiating open conversations with loved ones on end-of-life and legacy matters is a critical first step.”
Only 18 percent of people over 55 have all three expert-recommended legacy plan essentials: a will, a health care directive and a durable power of attorney. People who have these in place feel far more in control over their end-of-life affairs and are far more confident that their family could advocate for their needs, the study found.
In addition to these steps, when thinking of the future it’s imperative that only the right people (and no others) have access to passwords.
“In today’s digital world, clear instructions for managing and accessing digital accounts is essential to getting affairs in order,” Hindman said. “By age 50, people should designate a trusted durable power of attorney — or someone who can make financial and other asset and legacy-related decisions on your behalf should you become unable.”
It’s critical that a durable power of attorney or other designated parties have clear — and safely guarded — instructions specific to all online financial accounts, including bank accounts, online investments, savings vehicles and social media, so they can access your full financial picture and best carry out your late-life wishes, Hindman said.
More than money
The survey found that people want to be remembered for more than their money, with 94 percent of respondents saying the definition of a “life well lived” is “having family and friends that love me.” Second in priority (75 percent) is “having made a positive impact on society.” Only 10 percent say a life well lived is defined by “accumulating a lot of wealth.”
“The vast majority of people say they want to be remembered for their relationships and contributions — far more than for money and fame — and this is the case regardless of wealth,” Hindman said. “As Americans grow older, they can fulfill this essential part of their legacy by investing in time with family, friends and grandchildren, reflecting back on their lives and accomplishments and convening family members to pass down life lessons, memories and values firsthand.”
To allow loved ones to hold onto these important intangibles, put them in writing. Document personal values in a legacy letter, alongside accompanying photos, videos or personal documents, Hindman said.
Two-thirds of Americans 55-plus say they prefer to distribute part of their estate, 30 percent on average, while still alive.
“Giving while living can be a meaningful way to see your inheritance directly benefiting the next generation,” Hindman said. “Start by identifying those values and life lessons you most want to be remembered by and pass on to future generations. Then, develop a giving plan that aligns to these core values.”
This could mean giving charitably to a personal cause supplemented by a long-term giving plan and instructions for how heirs can continue giving on your behalf. Or, it might be making an early gift to a grandchild’s college fund to advance the value of education.
“Finally, don’t underestimate the power of time spent. Giving while living is an invaluable opportunity to ... have meaningful conversations about values and life lessons that can help subsequent generations navigate their lives,” Hindman said.