Tax & Estate Planning
Beyond estate planning: The value of ethical wills
  • Ethical wills are a great way for clients to leave behind personalized remembrance for loved ones.
  • While not legal documents, they allow individuals to speak from the heart, sharing personal stories and imparting ethical values that can endure for generations.
  • They can also effectively supplement legal instructions left behind in a will or trust document.

Estate planning naturally involves such tasks as writing a will or setting up a trust. But in addition to partnering with a client’s trusted legal counsel to create these documents, you may want to suggest clients go a step further by creating what’s known as an ethical will. Despite the formality of the term, ethical wills are not legally binding and generally don’t involve the help of an attorney. They are simply letters or videos created by a client to leave behind for family and friends with messages of varying forms and lengths.

Ethical wills serve a variety of purposes, but they’re used primarily to profess love, impart life lessons or underscore ethical values. Creating an emotional remembrance can be a powerful experience for clients, who will most likely appreciate your recommendation that they undertake the process. What’s more, few advisors bring up this topic, so most clients don’t even think about doing anything like this. But when you spark the suggestion, they will likely get excited about the possibilities, and it also can help you gain a closer connection to the next generation.

Ethical wills are often intended to provide a lasting touchstone for family members throughout their own lives. Some people use them as a way to reveal innermost feelings that they’re uncomfortable expressing in person. Parents often recount snippets of their lives to give future generations insight into who they were as people and what forces shaped them.

Ethical wills date back several centuries and have long been used in the Jewish faith. They’ve historically been written documents, as brief as a paragraph or as long as 10 or 20 pages. Recently, videos, electronic slide shows and other forms of digital communication have also become popular, partly because they allow people to be seen and heard. Whatever format is used, the key is to speak from the heart.

Clients are never too young to create an ethical will

Although last letters are typically associated with the end of life, it’s best to create ethical wills many years before that. Beyond their emotional impact on others, they can serve as guideposts to help the writers identify their own goals in life. At their most honest, ethical wills are a reality check for people to assess whether they’re following their dreams and living up to their ideals. It’s an opportunity to step back from day-to-day life to focus on the big picture.

The exercise is critical given that it’s all too common for people nearing the end of their life to feel regret. This takes many forms: disappointment at lives not fully lived, remorse over strained relationships, or guilt at the failure to convey love to spouses or children. Crafting a last letter can thus prevent an end-of-life epiphany that can strike when it’s too late to do anything about it.

Legacy letters can improve family dynamics

Depending on the dynamics of a client’s family and your relationship with them, some clients may want to share their ethical will with loved ones while they’re still alive to spur conversations about sensitive issues and reveal aspects of their lives. This provides a way to convey experiences and memories to children or even spouses that may not have come up otherwise. Remember that parents sometimes offer advice that doesn’t immediately resonate with their children but will one day. Still, other clients will prefer to seal the note or video and have you or another trusted person deliver it to the appropriate people at some later time.

Beyond the emotional impact, ethical wills serve practical purposes, partly by easing tensions that can spark family arguments over money. With your assistance, parents have the opportunity to explain the reasoning behind the strictly financial elements of their estate plans and elaborate on why they apportioned assets as they did.

Some parents tell stories of how they earned the money they’re passing on, such as the hardships and turning points they encountered. The goal is to prevent children from developing a sense of entitlement and inspire them in later years when they run into personal or professional roadblocks of their own.

Though there are no formal rules on how to write an ethical will, they should be upbeat and loving. Never be manipulative or judgmental. And don’t delay!


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