| |
|
|
|
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.
April 2007— This column is
produced by the Financial Planning Association, the membership
organization for the financial planning community, and is provided by
McGuire & Co., LLC, a local member of the FPA.
(Back to
Financial Planning Page)
|
|
