Ethical Wills Enrich Estate Plans


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An ethical will (or legacy letter) is a key complement for a legal will.

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Ethical Wills Enrich Estate Plans

  1. 1. Ethical Wills Enrich Estate Plans For an ethical will, you can now work with professional author Hawley Roddick, who is experienced in helping people create such legacy letters.
  2. 2. Value Added for the Writer <ul><li>An ethical (also called a legacy letter) can add value to an estate plan by: </li></ul><ul><ul><li>Clarifying criteria for managing and distributing wealth. </li></ul></ul><ul><ul><li>Focusing on who and what matter most (and why). </li></ul></ul><ul><ul><li>Guiding heirs who make end-of-life medical decisions for the author. </li></ul></ul><ul><ul><li>Counteracting any overemphasis on material assets. </li></ul></ul>
  3. 3. Value Added for the Attorney <ul><li>Ethical wills help estate-planning attorneys to: </li></ul><ul><ul><li>Execute an estate’s affairs in synch with the client’s ideas and values. </li></ul></ul><ul><ul><li>Supply support or a basis for intent during probate. </li></ul></ul><ul><ul><li>Know clients well and serve them better. </li></ul></ul>
  4. 4. Ethical Wills: Program <ul><li>Ethical Wills in Estate Planning </li></ul><ul><li>Ethical Wills’ History and Format </li></ul><ul><li>Profiting from an Ethical Will </li></ul><ul><li>Note: This presentation is adapted from a workshop about ethical wills that Hawley Roddick created and gave for attorneys in Santa Barbara, who received continuing education credits for attending. </li></ul>
  5. 5. Ethical Wills in Estate Planning
  6. 6. Unique Estate Planning Tool <ul><li>… While a traditional estate plan can accomplish the bequest of virtually any tangible possession, … an increasing number of testators are making provisions to pass on some of the wealth of wisdom that they have accumulated throughout their lives with ethical wills … [a] unique estate planning tool. </li></ul><ul><li>Mark P. Cussen,CFP®, CMFC </li></ul><ul><li> </li></ul>
  7. 7. Personal and Lasting Legacy <ul><li>[The] intangibles that make you who you are… comprise your personal legacy that you can pass on to your loved ones when you die [along with] your financial legacy. … An ethical will is a wonderful way to create a personal and lasting legacy. </li></ul><ul><li>John Ventura in Kiplinger's Estate Planning </li></ul><ul><li> </li></ul>
  8. 8. Unnecessary Neglect <ul><li>Notwithstanding the often considerable time spent in the estate-planning process, too many people fail to even consider, much less plan for, the transfer of wisdom, insight, experience and similar intangibles. This failure results in an unnecessary loss of real value to families, friends, and communities. … </li></ul><ul><li>… Lawyers can offer at least a partial solution by introducing their clients to an ancient ... tool known as an ethical will . </li></ul><ul><li>(Reintroducing the Ethical Will: Expanding the Lawyer’s Toolbox; Scott E. Friedman and Dr. Alan G. Weinstein. </li></ul>
  9. 9. Multiple Advantages <ul><li>An ethical will can: </li></ul><ul><ul><li>Pass along values as a legal will passes along valuables. </li></ul></ul><ul><ul><li>Become a mini-memoir. </li></ul></ul><ul><ul><li>Prevent future legal disputes by family members who might not understand the rationale for the terms of a legal will. </li></ul></ul><ul><ul><li>Serve as a first step for young clients who may then agree to write legal wills as well. </li></ul></ul>
  10. 10. Changing Lifestyles <ul><li>Timothy Mininger, a certified senior adviser and vice president at Univest Corp. in Souderton, PA, observed that: </li></ul><ul><ul><li>Many people in their 70s, 80s, and 90s see lifestyles they don't recognize, values that are much different from theirs, and it's somewhat distressing to them. </li></ul></ul><ul><li>While the intent of ethical wills is not to rule from the grave, people want a way to communicate their wishes and closely held values for posterity. </li></ul><ul><li>( </li></ul>
  11. 11. Prevention of Discord <ul><li>An ethical will can reach out to those who are estranged, offering the chance for understanding, resolution, and forgiveness. [It] can explain the provisions of [an] estate plan, easing the confusion and discord. </li></ul><ul><li> </li></ul>
  12. 12. Sharing an Ethical Will <ul><li>Your own ethical will can be important not only to family, friends, and legal and financial advisors but also to: </li></ul><ul><ul><li>The person you are about to marry. </li></ul></ul><ul><ul><li>Your children’s potential legal guardians. (Parents may write individual or joint ethical wills.) </li></ul></ul>
  13. 13. Ethical Wills’ History and Format
  14. 14. Recent Interest in Ethical Wills <ul><li>Ethical wills: </li></ul><ul><ul><li>Gained renewed interest in the United States in the 1970s. </li></ul></ul><ul><ul><li>Became more widespread as a result of the AIDS epidemic, especially among mothers with AIDS. </li></ul></ul><ul><ul><li>Are increasingly popular since 9/11 as people consider what is truly important. </li></ul></ul>
  15. 15. Ethical Will as Testament <ul><li>I help people with their Last Will and Testament, but the testament has fallen by the wayside in our time. Originally the testament was very much like an ethical will . Today, an ethical will can serve as the testament. </li></ul><ul><li>— A Santa Barbara attorney </li></ul><ul><li>March 2005 </li></ul>
  16. 16. History of Ethical Wills <ul><ul><li>The Hebrew Bible first described ethical wills 3000 years ago (Genesis, chapter 49). </li></ul></ul><ul><ul><li>References to this tradition are also found in the Christian Bible (John, chapters 15-18). </li></ul></ul><ul><ul><li>Ethical wills appear in other cultures as well. </li></ul></ul><ul><ul><li>Ethical wills were probably oral at first. </li></ul></ul><ul><ul><li>Written ethical wills survive from Medieval and Renaissance times. </li></ul></ul>
  17. 17. Format for an Ethical Will <ul><li>These days, ethical wills: </li></ul><ul><ul><li>May be a single paragraph or several pages— or longer. </li></ul></ul><ul><ul><li>Can be amended and restated at any time. </li></ul></ul><ul><ul><li>Are frequently preserved in a folder. </li></ul></ul><ul><ul><li>May be bound as a small hardcover book. </li></ul></ul><ul><ul><li>May or may not have religious connotations. </li></ul></ul><ul><ul><li>Are read by others (a) when written or (b) after the writer’s death. </li></ul></ul>
  18. 18. Contents of an Ethical Will <ul><li>Ideals </li></ul><ul><li>Goals </li></ul><ul><li>Values </li></ul><ul><li>Morals </li></ul><ul><li>Regrets </li></ul><ul><li>Insights </li></ul><ul><li>Wisdom </li></ul><ul><li>Blessings </li></ul><ul><li>Love </li></ul><ul><li>Dreams </li></ul><ul><li>Apologies </li></ul><ul><li>Memories </li></ul><ul><li>Life lessons </li></ul><ul><li>Explanations </li></ul><ul><li>Appreciation </li></ul><ul><li>Forgiveness </li></ul>
  19. 19. Ethical Will Exclusions <ul><li>Bossiness </li></ul><ul><li>Vengeance </li></ul><ul><li>Manipulation </li></ul><ul><li>Accusations </li></ul><ul><li>Recriminations </li></ul><ul><li>Criticism </li></ul><ul><li>Anything that might cause pain </li></ul>
  20. 20. Clarity <ul><li>It's not only who gets the grandfather clock, but who was grandfather? </li></ul><ul><li>— Tom McMillan, a Denver estate-planning attorney in Family: Ethical Will Power </li></ul><ul><li>From Family Giving News; , </li></ul>
  21. 21. Profiting from an Ethical Will
  22. 22. Ethical Will as Family Wealth <ul><li>Charles W. Collier, as senior philanthropic adviser at Harvard University, observed that family wealth comprises: </li></ul><ul><ul><li>Human capital (the family’s individual members) </li></ul></ul><ul><ul><li>I ntellectual capital (family members’ ability to learn, communicate, and make joint decisions), and </li></ul></ul><ul><ul><li>S ocial capital (how family members engage with society at large). </li></ul></ul><ul><li>The key to enhancing this “family wealth” is communication: </li></ul><ul><ul><ul><li>“ The most successful families tell and retell the family’s important stories, and include mentor-like relationships between the generations.” </li></ul></ul></ul><ul><ul><li> </li></ul></ul>
  23. 23. Ethical Will in a Family Business <ul><li>[In his ethical will]… a grandfather, whose parents began a family business, tells his grandson about the history of the business  about his business philosophy,  about the rationale for the major decisions he made to grow the business  and about the directions he anticipates for the future of the business. The grandfather can also talk personally … about the mistakes he made  and the values that are important to him. </li></ul><ul><li>For the grandson,… there is a unique opportunity to learn firsthand about the legacy of the business and … as part of his family's identity. </li></ul><ul><li>Excerpt Financial Planning article by Helene Stein and Marcia Brier </li></ul>
  24. 24. Psychological Benefits <ul><li>Ethical wills promote peace of mind as well as: </li></ul><ul><ul><li>A heightened appreciation for life and a sense of purpose. </li></ul></ul><ul><ul><li>Opportunity to reflect on your past. </li></ul></ul><ul><ul><li>Pride in what you have accomplished. </li></ul></ul><ul><ul><li>Guidance in mapping your future path. </li></ul></ul><ul><ul><li>Greater awareness of what you still want to do. </li></ul></ul>
  25. 25. Health Benefits <ul><li>Studies here and abroad suggest that writing about topics that reflect your strongest, deepest emotions: </li></ul><ul><ul><li>Strengthens the immune system. </li></ul></ul><ul><ul><li>Improves mental health. </li></ul></ul><ul><ul><li>Contributes to emotional well-being. </li></ul></ul><ul><li>Pennebaker, J. Opening Up: The Healing Power of Expressing Emotions New York: Guilford Press, 1997 </li></ul>
  26. 26. Ethical Wills for Philanthropists <ul><li>National Center for Family Philanthropy President Virginia Esposito points out that: </li></ul><ul><ul><li>For philanthropists, ethical wills can be a good way to convey to heirs the satisfactions of philanthropic giving and the values that inspire it. </li></ul></ul><ul><ul><li> </li></ul></ul>
  27. 27. Philanthropy and Identity <ul><li>A Santa Barbara nonprofit organization received a large bequest from a donor who had died. They knew nothing about him and could find out nothing. They wished he had left an ethical will, which can be a valuable resource for such organizations when they seek information about a major donor. </li></ul>
  28. 28. Values <ul><li>At the Web site of Robert L. Payton, a founder of the Center on Philanthropy at Indiana University, he writes: </li></ul><ul><ul><li>The seminars I've given in recent years begin with sharing a summary &quot;philanthropic autobiography,&quot; about the sources of our values, and end with a take-home assignment to write an ethical will. </li></ul></ul><ul><li> </li></ul>
  29. 29. Ethical Wills for Poor and Rich <ul><li>Ethical wills can provide benefits for families at all income levels. For example: </li></ul><ul><ul><li>Families without significant material wealth can reflect on their many blessings unrelated to money. </li></ul></ul><ul><ul><li>Affluent families can begin to heal wounds caused by disputes over (and actions relating to) their wealth. </li></ul></ul>
  30. 30. The Last Word <ul><li>Robb Report ( 5/25/03) on ethical wills: </li></ul><ul><li>Leave your heirs something more valuable than your estate. </li></ul>