Why legacy goals should be part of your retirement plan

Some of us want to give a specific amount of money to our loved ones during our retirements; others want to ensure that they leave a sum of money to their children and grandchildren in their wills, whilst another group don’t mind how much they leave. Our approaches might be different, but we all have a “legacy goal”, even if that goal is to spend our last Pound as we breathe our last breath.

Your legacy goals can seriously impact what your retirement will look like. Replacing one type of legacy goal, such as leaving a specific amount of money to your children during your lifetime, with another, such as spending all of your capital during your lifetime, could mean that you’ll have more to spend on yourself in retirement (and you might not need to save as much before you can afford to retire). The impact of your legacy goals on your retirement plans will be significant.

There’s no right answer to what your legacy goals should be (although plenty of people will tell you otherwise!) – the decision comes down to what is important to you. How upset would you be to leave behind less than you anticipated, or even nothing at all?

What is your Legacy Goal?

Our experience is that most of our clients have one of (or a combination of) the following goals, and they express them in this sort of way:

  • We’d like to leave a specific amount to our family during our lifetimes.
  • We’d like to make some specific bequests in our wills.
  • We don’t mind how much we leave to our loved ones, following our deaths, but would like anything left over to be divided fairly.

It’s important to decide which legacy goal you have, as part of your retirement plan. That way, your retirement plan can cater for your legacy as well as your own spending needs.

Inheritance Tax

This peculiar tax often can often result in people taking actions that they might never consider otherwise. Often, people set up complicated arrangements, which have the potential to cause complications and conflict down the line, just to avoid inheritance tax. Many people are persuaded to take action to avoid inheritance tax, without first considering their other legacy goals. Our view is that you should first decide what your legacy goals are, then work out how to minimise the amount of inheritance tax you will pay whilst achieving those legacy goals.

We do accept that minimising inheritance tax can be part of your legacy goals. But it’s unlikely to be your sole legacy goal (if it were, you could just leave all of your legacy above the nil rate band to a charity or a political party). Some of this tax is illogical (e.g. the annual gift allowances never seem to increase). And, of course, inheritance tax can and will change.

Don’t ignore your legacy goals

A financial plan for retirement isn’t complete unless it includes consideration of your legacy goals. These goals should be included in your plan from outset, and kept under review throughout your retirement.

If you would like us to help review your retirement plan, please get in touch.

Philip Wise | philip@sussexretirement.co.uk

Managing Director and Chartered Financial Planner


The Financial Conduct Authority does not regulate some aspects of Trust, Tax and Estate Planning

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