Leaving a lasting legacy

This was published 9 months ago

Leaving a lasting legacy

This is sponsored content for MLC

What does it mean to leave a legacy behind? We can leave our home, our investments and our possessions to those we care about. But our legacy really is so much more than that: it’s the time spent with children and grandchildren, the pearls of wisdom passed down in the workplace, hours spent volunteering in the community, and, for those who can afford it, philanthropic donations to institutions and worthy causes.

While obituaries of the well-known discuss legacy in the context of their talent, wealth or authority, leaving behind something of worth is not the preserve of the rich or famous.

Legacy is more than leaving investments for those we care about, it's the pearls of wisdom we pass down.

Legacy is more than leaving investments for those we care about, it's the pearls of wisdom we pass down.Credit: Supplied.

Dr Sarah Cotton, psychologist and founder of Transitioning Well, a company that helps people and organisations navigate life transitions such as retirement, says it’s far more personal: more about meaning and less about money. A US study of 3000 people found that 94 per cent of respondents defined a life well lived as “having friends and family that love me”, while 75 per cent said it was about “having made a positive impact on society”. Just one in 10 respondents defined it as “accumulating a lot of wealth”.

Whether single, divorced, in a same-sex relationship, childless or the forebears of dynasties, we’re all going to leave a complex legacy behind – more far-reaching than the sum of our assets.


“It’s the memories, the stories, the impact we have on a child or grandchild, sometimes teaching them our special skills, such as fishing or cooking,” Cotton says. Giving of ourselves carries great value: the carpenter who turns his well-trained hands to toy construction at a local men’s shed, the keen gardener who keeps the community plot weed-free or the grandparent who cares for a little one to help out working parents.

Sydney retiree Marjorie Ong, 71, dedicated two days each week to caring for her grandchildren until the youngest started school this year. “I wanted to help my son and daughter-in-law because they both work full-time, but I got back so much more from bonding with my grandchildren,” she says. “We are very close.”

Cotton says people often don’t consider intangible legacies such as this. “That’s something you can also plan for in conversations about retirement,” she says. “I think it can be useful to think about our non-financial legacies in a deliberate manner.”

A living legacy

Pre-retirement is the ideal time to start thinking about legacy, but it can happen at any time, or throughout a lifetime. While some of us race towards retirement as if it’s a chequered flag marking the welcome end of a long working life, others dread it, perhaps seeing it as the end of usefulness, or as a challenge to identity. But retirement is best seen as a life transition.

In some ways, retirement is more flexible than other major milestones. People may semi-retire or decide after a break to re-enter the workforce. Some couples are determined to live it up while they can and spend the kids’ inheritance, while others invest heavily and live frugally with the idea that their legacy should be something that makes their children’s and grandchildren’s lives easier.

Asked about common financial mistakes people make in retirement that might affect their legacies, Tim Steele, General Manager Retirement and Investment Solutions at MLC, says he sees both ends of the spectrum.

“People have a real fear about outliving their money,” Steele says. “But if you become too cautious in your investments, holding less growth assets and more defensive assets, your nest egg could shrink before it needs to. And we see people towards the end of their lives who have lived extraordinarily conservatively, fretting over putting the air conditioning on in summer and the heating in winter, when, quite frankly, they could have afforded to take overseas trips every year for the rest of their lives and still leave a legacy.

“At the other extreme there are people who put their heads in the sand and live life as if the money will never run out, when a few simple austerity measures could have made a world of difference.”

All about family

Moving out of the city could boost emotional and financial legacies.

Moving out of the city could boost emotional and financial legacies.Credit: Supplied.

Downsizing the family home can transform a legacy by freeing up capital for voluntary pursuits or caregiving, or to make life more financially secure for future generations.

A Canstar/Domain survey found 45 per cent of parents were willing to lend their children money for property.

Steele says there are advantages to downsizing out of the city to boost emotional and financial legacies. “If you look at the average cost of living, regional and rural areas are typically cheaper to live in than metropolitan areas,” he says. “As well, the government is encouraging people to do that through some downsizing provisions.”

A recent MLC white paper, The Roof over Retirees’ Heads, says these provisions include the ability for over-65-year-olds to contribute up to $300,000 from the sale of their primary home to superannuation. However, the white paper says: “Housing decisions cannot be viewed simply through a financial lens, but need to take into consideration social, geographic and emotional factors as well.” In other words, the impact on family and friendships cannot be underestimated.

A conditional ‘gift’

Financial legacies, including proceeds from assets and investments, are not without complications. Generally, capital gains tax doesn’t apply to loved ones who inherit the family home. Tax payable on superannuation benefits is commonly governed by the rules of the super fund, and not the last will and testament, but you should check with your financial adviser. Bequest forms for universities, sporting clubs and charities abound online; the Brisbane Broncos recently became the first NRL team (following the AFL’s lead) to establish a bequest program for die-hard fans. An estate lawyer is best placed to advise on the tax implications of all the above.

So, what legacy will you leave behind? Don’t underestimate the little things. “I think my legacy would be my family,” says Marjorie Ong. “I know I have brought them up to be responsible, honest and caring people. And they are bringing up their children in the same way. So, I’m very proud of my family, and that’s my legacy.”

We’re all going to leave a complex legacy behind – more far-reaching than the sum of our assets.

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