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 may be a valuable 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.
can share your values, hopes, life's lessons, loves, and forgiveness with
your family and community," explains Barry K. Baines, author of Ethical
Wills: Putting Your Values on Paper (Da Capo Press Lifelong Books),
which he wrote after his father outlined his values in a letter shortly
before he died of lung cancer in 1990. "You can honor the past, capture
the present, and inform the future."
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 more commonly shared during the author’s life.
Kathleen M. Rehl, a financial planner in Land O’Lakes, Fla., says, “For those who take the time to reflect on their past, this can be a very positive spiritual experience.” Indeed, many financial planners are increasingly focusing on clients’ issues for planning purposes and helping them create ethical wills. While exact figures aren’t available for how many people are writing ethical wills, they are on the rise, based on increased Web activity and sales of ethical will resources.
Ken Wheeler, a tax and estate-planning attorney in Winter Park, Fla., who calls himself a “wealth care lawyer,” says, “If an individual is so inclined, they can have a significant influence on future generations through the words they use in their ethical will.” The word “will,” however, may leave a negative connotation in some minds. “It’s synonymous with death,” says Wheeler, “and death is a concept some people have a great deal of difficulty dealing with. It’s painful. For that reason, I like to stay away from the word ‘will.’ I refer to it as a ‘values and vision statement.’”
Why create one?
People are inclined to write an ethical will when facing a challenging event, or at a turning point or some transition in life, says Baines.
Some examples are facing the loss of a loved one, birth of a grandchild, expectant parents, becoming an empty-nester, or facing the end of life.
Stuart C. Bear, an estate-planning and elder-law attorney who practices in the Minneapolis-St. Paul area, says, “When I am assisting clients with estate planning, by establishing wills and trusts, some are interested in more than just effectively transferring assets. They desire to provide guidance to their children by sharing their own personal story and knowledge gained in life through their experiences.
“If the children are younger, they might want to provide instruction to their fiduciaries and appointed guardians in terms of the raising of their children and parenting, as well as monetary values.”
Pros and cons
The “pros” of an ethical will 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 them, says Wheeler. This is valuable information not only for their families but their professional advisors 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 so desires.
The “con” is that an ethical will is not enforceable in a court of law. Those who want to provide specific instructions, which are to be carried out and enforced by a court of law, would need to put the instruction in a will or trust.
Setting up an ethical will
There are three basic ways to write 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. Examples that Baines offers in his Ethical Wills Workshop Facilitators Network are: "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.
Sharing your will
Baines recommends sharing your ethical will not only with family and friends, but also with your financial advisor and attorney. “These professionals are often relied upon for advice in making important decisions, like your financial or estate plan,” he says. “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 on into the future.”
Some of Rehl’s clients have told her they believe their heirs “will probably remember them more for what they say in their ethical will than through the ‘stuff’ they leave behind in their legal wills.”
Many of her clients have shared their ethical wills with family and loved ones prior to passing away. For example, after one client shared her ethical will with her daughter, the daughter was so moved she went through the same process with her daughter. “My client said it was a very positive experience, as it gave her time to reflect on so many fond memories of the past,” says Rehl.
An ethical will speaks to one’s posterity or descendants long after the legal will has been probated and forgotten.
“Some people of means are concerned about leaving something besides money to their families,” says Wheeler. “If all you leave them is money, all you’ve left is an inheritance, which can be and is usually spent within an average of 18 months. If you attach your values to the inheritance, it adds another dimension to your legacy.”