LotRO Details Exactly How You'll Get Your New Legendary Item Parts
Old LIs can be converted into items needed for new ones.
It's not often we get a full-fledged blog post from Standing Stone Games, who generally prefers to stash important The Lord of the Rings Online updates in forum posts, as it did with the initial description of how the new legendary item system would work. Now, with the Fate of Gundabad expansion imminent, it looks like that system has crystallized enough to get an official article on the website going into intricate detail as to how you'll get and improve your LIs.
Your legendary journey starts in pretty much the same way it always has -- around level 50 when you first enter the Mines of Moria. You'll be able to improve it with four types of a new item, called traceries, which you can level up and replace for better ones. Naturally, you'll lose any traceries you have by replacing them, unless you spend Mithril Coins to retain them. The best traceries will be bartered for using cracked and shattered traceries, loot that can be found in high-end endgame content.
Your old legendary items can still be used after the update goes live, though you'll see a button that allows you to "convert" them into the right amount of currency needed to get a roughly equivalent item. You can't equip both a new and old legendary item, and old LIs can't be reforged once the update goes live.
That will happen on October 13, so you've got about two more weeks to deal with the old system until you can try out the new one. This old LotRO player is optimistic that it will turn out well, but not too optimistic, given how previous efforts to revamp the system have gone.
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About the Author

Jason Winter is a veteran gaming journalist, he brings a wide range of experience to MMOBomb, including two years with Beckett Media where he served as the editor of the leading gaming magazine Massive Online Gamer. He has also written professionally for several gaming websites.
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