I hope that I leave you with something of spiritual and material value that will help you become responsible and caring members of society. The world is yours to explore and in that exploring, you will come to understand and appreciate your place in the big picture of life. A loving heart, positive values, strong character and a social conscience are far more important than material wealth.
-Ethical will excerpt from a client of a financial advisor
Some financial advisors use ethical wills to help clients define their legacy as part of the estate planning process. This is based on the notion that we all leave a legacy that goes beyond money and material possessions. For clients, ethical wills offer a way to be remembered and to positively influence the next generation.
While gaining in popularity, little is known about the use of ethical wills by financial planners and attorneys. How do they integrate ethical wills into their practice? In what ways do they start legacy conversations with clients? What is the client response? What are the advantages and disadvantages of this work? What follows are the responses from a national phone survey of advisors actively using ethical wills in their practices.
What Is An Ethical Will?
With a basic or traditional will of inheritance, both money and real estate are transferred to the next generation. An ethical will is not a legal document and does not easily fit into the traditional tax and legal language of basic wills. An ethical will is a statement of values, beliefs, blessings, wisdom and family stories. Most contain one or more of the following: hopes for the future, lessons learned from life experiences, appreciation for heirs, religious or spiritual beliefs, and comfort thoughts (e.g., statements of forgiveness, acceptance of death).
What Is The Appeal?
Advisors often see the negative consequences or “ugly aspects of estate planning.” Witnessing family conflict is one clear motivation to move beyond an exclusive focus on money and real estate. Preserving family harmony is vital, and many consider it an integral part of successfully doing their work. Several echoed the sentiment of one attorney from Florida who said, “I want to help my clients reconcile before it’s too late.”
Many talked about the deeper meaning of money. “Money always has an agenda and that must be addressed.” Doing so means expanding the traditional model. As one planner commented, “I love marrying the quantitative with the qualitative.” Several advisors referred to this as a process that connects the heart and soul with money. They are excited to offer ethical wills in their menu of services. An attorney from Georgia described the importance of offering a tool that promotes a “more humane process.”
What’s In A Name?
A number of advisors, both planners and attorneys, do not use the name ethical will. They use a different title, one that seems consistent with their own values and practice orientation. Attorneys are concerned about the possible confusion between ethical wills and basic wills of inheritance. They accurately pointed out that ethical wills carry no legal force. They reported using the following names:
Legacy Declaration
Values and Vision Statement