What Is Legacy Planning and Do I Need It?

If you’ve spent years building your wealth, carefully managing your assets and planning for retirement, you’re already ahead of the game. But have you thought about what comes next, not just for you, but for those you care about?

Legacy planning is a critical, often overlooked component of long-term financial security. While many people associate it solely with estate planning or wealthy families, the truth is that legacy planning is for anyone who wants to take control of how their wealth is preserved, protected and passed on. It’s about more than just leaving money behind. It’s about defining the impact you want to have long after you’re gone.

Whether you’ve already established a retirement plan, invested in insurance or started building intergenerational wealth, this is your opportunity to take your financial strategy to the next level.

What is legacy planning?

Legacy planning is a comprehensive approach to organizing your assets, intentions and values in a way that ensures your wealth and your wishes are honored after your death. It goes beyond the basics of estate planning (like drafting a will or establishing a trust) to include:

• Articulating your values and vision for future generations.
• Strategizing tax-efficient wealth transfer.
• Funding charitable or philanthropic efforts.
• Ensuring business continuity or succession.
• Protecting loved ones from unnecessary financial burdens or conflicts.

In short, legacy planning combines the practical with the personal. It’s as much about what matters to you as it is about what you own. Read our blog to learn more about the basics of estate planning.

Why you should care about legacy planning

You may already have a solid grasp on the fundamentals of personal finance: budgeting, saving, investing and maybe even insurance and tax strategy. But as your financial situation becomes more complex, whether through career growth, inheritance or business ownership, the need for a coordinated legacy plan becomes more pressing.

Here’s why:

You have more to protect than you think. Once your net worth crosses certain thresholds, you become subject to potential estate taxes and probate costs. Even if your estate isn’t massive, the lack of a plan can lead to unnecessary legal delays, fees and even family disputes. Legacy planning helps streamline the transfer process and reduce financial drag.

Life happens quickly. Unexpected illness, injury or death can derail even the best-laid plans. A well-crafted legacy strategy includes powers of attorney, advance directives and succession plans, so your wishes are known and enforceable, even if you can’t speak for yourself.

You want to maximize impact. You’ve worked hard for what you have. Whether it’s providing for your children, supporting a cause you care about or preserving your family business, legacy planning lets you be intentional about the mark you leave behind.

What are the key elements of a strong legacy plan?

If you’re ready to get serious about legacy planning, here are the pillars you’ll want to consider.

• Will and trusts – Your will specifies who gets what—but it may not be enough on its own. Trusts can add control, privacy and protection. For example, a revocable living trust allows you to pass assets without probate, while a testamentary trust can dictate how and when your beneficiaries receive funds.
• Beneficiary designations – Retirement accounts, life insurance policies and investment portfolios often pass outside of your will. Keep beneficiary designations up to date and coordinated with your larger estate plan to avoid conflicts or unintended distributions.
• Tax strategy – Estate taxes, gift taxes and capital gains can erode the value of your estate if not properly managed. A legacy plan can incorporate tax-efficient giving strategies, like annual gifting, charitable remainder trusts or life insurance to cover anticipated tax liabilities.
• Philanthropy and charitable giving – For many people, part of their legacy includes making a difference. Donor-advised funds, private foundations and charitable trusts can help you contribute in a tax-smart way while aligning with your values.
• Life insurance – Life insurance can be a powerful tool for legacy planning. It can help equalize inheritances, fund tax obligations or provide liquidity when other assets like real estate or business interests are not easily divisible. Permanent life insurance can be used strategically to preserve wealth and support long-term planning goals.
• Family conversations – Perhaps the most overlooked element of legacy planning is communication. By sharing your intentions and values with your family ahead of time, you reduce the risk of misunderstanding or conflict. You also can teach your heirs how to manage wealth responsibly as part of your legacy in action.

Where to start when making a legacy plan

You don’t have to tackle it all at once, but you should start. Here’s a basic roadmap:

1. Inventory your assets – List everything—property, retirement accounts, business interests, life insurance policies and even digital assets.

2. Clarify your goals – What do you want your wealth to accomplish? Who do you want to benefit and how?

3. Assemble a team – A financial professional, estate attorney and tax professional can work together to design a plan that’s legally sound, tax-efficient and aligned with your values.

4. Create or update documents – If you haven’t reviewed your will, trust or beneficiary forms in the last three to five years, now’s the time.

5. Communicate your plan – Set aside time to talk to your heirs, share your thinking and document your intentions clearly.

The legacy you leave begins now

Legacy planning is about more than passing on wealth, it’s your opportunity to provide direction, reduce uncertainty and protect the people and priorities that matter most. When your financial plans reflect your long-term goals, you create a foundation that can support future generations with confidence. If you want your assets to be used the way you intend, planning is essential, and there’s no better time to get started.

Ameritas® does not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.