Advice When Wanting To Leave More Than Money

Advice When Wanting To Leave More Than Money

OCEAN CITY — 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.

"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.

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 context."

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.

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.

Although the term ethical will suggests an end-of-life document, these days families increasingly write them together, while the senior generation is still a strong and vibrant voice within the family structure. One family Allred works with revisits the will as part of its annual meeting. At the end of every gathering, each family member writes down a story, a lesson learned in the past year or simply a favorite memory.

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."

(A Wealth Management Advisor, who can be reached at 410-213-8520.)