|
Creating an Ethical Will
You may or may not have heard the term "ethical
will". But, for those who care about making their values
and ethics part of their legacy, it is a tool to consider when
planning your estate.
Unlike a "last will and testament", which provides
for the distribution of a person's material assets, or a
"living will", which contains instructions for how you
want to be treated medically at the end of your days, an
"ethical will" is designed to let someone preserve and
share their values, principles and beliefs for heirs and future
generations, though it's not legally binding.
According to Personal Legacy Advisors' web site, an ethical
will is a letter that transmits the non-material assets that are
also of great importance: your values, your story, the lessons
life has taught you and the other information that is too
valuable to risk being lost. Your ethical will is the tool that
enables you to address the question, "What do I want my
loved ones to know?"
Financial writer Bruce Fraser says, "As a concept,
ethical wills are not new. The first written reference to
ethical wills occurs in both the Hebrew and Christian Bibles.
Examples are Genesis, chapter 49, and The Book of John,
chapters 15-18. Over time, they evolved into written
documents."
While ethical wills were traditionally shared after death,
along with the reading of an individual's last will and
testament, today they are often shared during the author's life.
Exact figures aren't available for how many people are writing
ethical wills but they are on the rise based on increased Web
activity and sales of ethical will resources. They have gained
impetus particularly in the wake of tragedies like the September
11, 2001, terrorist attacks.
Fraser shares these tips and tactics in a November 2006
Financial Advisor magazine article:
Why create one? People are inclined to write an
ethical will when facing a challenging event, or at a turning
point in life. Some examples are facing the loss of a loved one,
birth of a grandchild, expectant parents, becoming an
empty-nester or approaching the end of life. Other reasons to
create an ethical will include:
- Your reflections will
confirm what's important and renew appreciation of your life
to date
- You will create a
personal message to those you love, of priceless value in
the event of your absence
- If you do not tell
your personal (and family) stories, they may be lost forever
- Your material assets
can be given within a personal context
- You will mitigate
confusion and hurt feelings with a personal explanation of
potentially controversial elements of your legal will
- Your spirit will be
expressed on paper, living beyond you in a timeless way
- Your words will link
the past, present and future generations of your family
- You will enjoy peace
of mind knowing the most important things will have been
said.
Pros and cons. The pros of an ethical include having
an opportunity to influence future generations. Through the
process of writing an ethical will, the writer can gain
self-knowledge and come to an understanding of what's most
important to him or her. This is valuable information not only
for their families but their professional advisers as well.
Another pro is that ethical wills are private documents. Unlike
a will, which if admitted to probate will become a matter of
public record, an ethical will is a private communication and
will not be made public unless the author (or recipient) so
desires. The con is that an ethical will is not enforceable in a
court of law. Those who want to provide specific instructions,
such as who is to receive which asset or how assets are to be
distributed and under what conditions, would need to put the
instruction in a will or trust.
Setting up an ethical will. Ethical wills come in a
variety of forms, from a short letter to a lengthy
autobiographical statement, from an audio-recorded message to a
bound album. There are three basic ways to create an ethical
will.
1. Begin with an outline and list of suggestions. Once you've
created a rough draft, you can review and personalize it as much
as you wish.
2. Begin with guided writing exercises. For example, start
with phrases such as "From my grandparents, I learned…"
or "I am most grateful for…"
3. Begin with a blank sheet of paper and write down whatever
is relevant about your thoughts, experiences and feelings. This
is an open-ended approach. Eventually you should be able to
create a comfortable structure for your ethical will. For
one-on-one help, an organization like the Association of
Personal Historians may be of assistance.
Other tips from Personal Legacy Advisors include the
following:
- Start today: If you
were not here tomorrow, what is the most important thing you
would not want left unsaid? Write it down - now you've begun
- Relax: You are not
trying to write for the Pulitzer Prize. The letter is a gift
of yourself, written for those you love
- Ask yourself: What do
I want to make sure my loved ones know and have in writing
- Take it topic by
topic: Don't try to write it all at once
- Be yourself: You
cannot bequeath what you never owned to begin with
- Be careful, be loving.
The reach of this letter is unknowable.
Sharing your will. It's a good idea to share your
ethical will not only with family and friends, but also with
your financial adviser and attorney. Knowing what you value and
what's important to you will help them to develop a personalized
plan that can help you to leverage your values in the future.
An ethical will speaks to one's posterity or descendants long
after the legal will has been probated and forgotten. Of note,
an ethical will is a dynamic document. Just as a will or living
trust document needs to be revisited so does an ethical will,
because events occur in ones' life that have an impact on ones'
value systems.
February 2007 — This column is produced by the Financial
Planning Association, the membership organization for the
financial planning community, and is provided by Don McCarty of
Financial Decision Partners, a local member of the FPA.
|
