BERLIN – Eventually, most parents of even
modestly substantial means end up thinking long and hard about their legacy.
If you haven’t already done so, you’ll probably
ask, How much money will we be able to leave to our children? What form should
our legacy take? If you own a family business, there are also questions of
succession to consider, as well as issues regarding how to treat your children
fairly — whether they are involved in the business or not.
As crucial as these questions may be, there is
another aspect to a legacy that’s often overlooked: the values that shaped your
success. Without an appreciation of the work and wisdom that went into building
the wealth they receive, says Wayne A. Cooper, a Wealth Strategist and
Director, Client Solutions Group at Merrill Lynch, your heirs may have a
harder time holding onto it, let alone building on it to create the sort of
legacy that can benefit future generations.
One way to bridge this gap and shape a legacy
that benefits your entire family is to create an ethical will.
Often no more than a page or two, an ethical will
allows you to share your vision for your family for generations to come. It can
also go a long way toward instilling the values you expect your heirs to live
by and encouraging them to consider how they contribute to their communities
and the world.
"We look at ethical wills as a way of
telling stories," Cooper says.
He recommends that clients use them to talk about
their experiences and teach future generations the lessons they learned along
the way. The exercise helps them identify and articulate the legacy they want
to leave. Authors can write as much or as little as they want and can rewrite
their ethical wills as their lives unfold.
Although they have no legal standing, these
ethical wills, used in conjunction with documents that determine how assets
will be distributed, can open up communication between generations while
helping to inform and complement an estate plan.
"Wills and trusts put restrictions on money
for good reasons," Cooper says, "but they may also create resentment.
Explaining why you set up your plan the way you did can serve as an important
element in creating family unity, and an ethical will can provide that
A formal will may not necessarily say "I
love you," yet many of the clients with whom Cooper works use an ethical
will precisely to express what their family means to them.
Ethical wills are as unique as the individuals
who write them. Some people generate substantial texts that describe major life
events and explain how they shaped personal goals, beliefs and values, offering
rich insights for generations to come. Many families now hire professional
writers and videographers to help draw out their thoughts and craft their
Still, even a simple ethical will written around
a single topic, such as "My Definition of Success" or "What I
Cherish Most," can allow you to pass on important life lessons and provide
loved ones with a clear sense of your personal values, says Stacy Allred,
Director, Wealth Structuring Group at Merrill Lynch.
The ultimate goal is to build a legacy that can
be passed down through multiple generations. Allred works with a family that
pulls out the patriarch’s ethical will every time a difficult discussion arises
over finances or any other major family decision. "He did a fabulous job
with advice and guidance," Allred says. "His ethical will goes beyond
life lessons to include specific things around finances and what he viewed as
the responsibility that comes with wealth. The impact it has had on his
children and grandchild is just astounding. I never met the man, but I feel
like I know him too."
Merrill Lynch Wealth Management Advisor. She can be reached at 410-213-8520.)