His phylactery is actually a 50,000 gp gem that has been used as the focal point for a "Trap the Soul" spell on the Tarrasque (or other legendary creature that has been missing for the last several decades or centuries). No one knows this, not even the lich anymore.
The phylactery was then transported to a particularly inhospitable region of the Far Realms. The PC's cannot retrieve it personally, as their sanity and physical form would be irrevocably warped by the energies of that insane realm.
However, there is a method of recalling the phylactery back to our realm. You must find and speak the true name of the lich, something he himself cannot recall. There are good aligned organizations that work to prevent this, as speaking his name to recover the phylactery will open a rift to the Far Realms, and it may not close on it's own.
The true reason the lich wants his phylactery destroyed is that he is afraid of dying and reforming in the far realms. Also, he can feel the blasphemous nature of that place slowly warping the magics that protect his phylactery, and through his link to the phylactery it is affecting him. He can feel his memories and sanity is slowly slipping away. If the phylactery is not recovered or destroyed soon, he may become a living conduit to the realm of insanity, spewing forth madness tainted magic and creatures. This is a fate worse that the final death, even for a lich.
Once his phylactery is retrieved and destroyed, the creatured imprisoned within it is released, and it has been warped by the far realm energies. Now the true fight is on.
