Reasons to Consider an Ethical Will

It was Father’s Day -- Sunday, June 17, 1979 -- and my dad was out of town on a business trip. It was long before cell phones and we didn’t have voice mail, so although I tried to reach him at his hotel that day, I never did get through -- as so often happened back then.

I will forever wish I had reached him, because he died that evening of a heart attack at the young age of 64. I often wonder what he would have said to me that Father’s Day, as holidays and special occasions were his favorite time to pass on to me family stories, advice and encouragement.

With Father’s Day on Sunday, it may be a good time for boomer dads and granddads to reflect on ethical wills and how priceless the transfer of your personal values and wisdom can be to your surviving family.

Michael T. Cyrs, estate and wealth transfer advisor for Savant Capital Management, discussed with me how ethical wills are becoming a mainstay in estate planning and how to incorporate them into your overall plans.

Boomer: What is an ethical will and what is included in one?

Cyrs: Ethical wills are written and non-written directives that are structured to transfer an individual’s values, wisdom, personal beliefs and family heritage to their descendants.

Ethical wills take many forms, such as letters, videotaped or recorded audio messages, written materials and/or manuscripts.

Ethical wills can even take the form of simple lists identifying specific items(collections, jewelry, dishes, furniture, tools, awards, etc.) of personal value that are given to specific individuals, with an accompanying articulation of a personal  message or of the family history behind such items. For example, a family chest might be given to a child with a written message about how that item was brought over from “the old country” when the family member’s grandfather immigrated a generation before,  with an accompanying understanding that the chest contained all they possessed. Alternatively, a large serving dish and family recipe might be given in an ethical will message with a written exhortation of a long-held family tradition of Sunday afternoon dinners when everyone gathered together at a grandmother’s home.

More detailed ethical wills might involve comprehensive written letters or manuscripts of personal wisdom and values, a recorded history of family heritage, one’s profession or of how family business or wealth was created, or short stories of life’s lessons learned from which other generations might benefit. As such, ethical wills are not just for the affluent, given that they often represent the “true valuables” of guiding principles and family heritage, and often accompany items or life experiences of value only within a personal family context.

Affluent individuals have also found ethical wills to be extremely beneficial when transferring accounts and property of significant monetary value  because the statistics are overwhelmingly against them that monetary wealth left to family members without “ethical will” type directives is dissipated quickly in the next generation.

Boomer:  Why write an ethical will?

Cyrs: Ethical wills are written to develop an understanding of family heritage, to share advice and wisdom, and give long-term meaning to and to better preserve monetary and property bequests. Ethical wills have been around as long as recorded history, but have recently made a resurgence in estate planning as many have found that millennials lack the maturity otherwise developed to handle monetary bequests, even when those bequests are held in traditional trusts for them and distributed only slowly over time. There are now many national organizations that assist in the writing of ethical wills, such as The Purposeful Planning Institute, Empowered Wealth, SunBridge Network and 3-GEN Planning.

Boomer: When would I write an ethical will?

Cyrs: Ethical wills are for everyone, and can be written anytime. They should be done as soon as possible with the other elements of estate planning, including Last Wills, Trusts, Powers of Attorney for Property and Health Care and Living Wills. Young parents might also write ethical wills for their children when their children are first born, to be given to their children and their children’s chosen guardians if the parents were to die when their children are very young. This is something we certainly don’t want to think about, but imagine how meaningful a letter like that might be to a child.

Individuals of all ages might write ethical wills or testamentary messages for their spouses expressing gratitude and encouragement. Older individuals might write ethical wills for their children and grandchildren, or to be given to charities with a specific monetary gift to identify the desired use of the monetary gift.

Boomer: What is the difference between an ethical will and what is known as a Last Will and Testament?

Cyrs: Traditional Last Wills and Testaments are formal written directives that direct the disposition of accounts, investments and real estate. Ethical wills are written and non-written directives that involve the disposition of values, beliefs and guiding principles.

Boomer: Can an ethical will be incorporated into your estate planning?

Cyrs: Yes. Ethical Wills’ messages can be incorporated directly into Last Wills in the form of what is commonly called precatory language, or in Preambles which begin the actual text of the Last Will document itself. Ethical wills are also often separate documents left sealed with formal Wills and Trusts, to be opened and read upon death as part of the overall estate plan.