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The Montana Estate Lawyer

Monday, December 23, 2013

Make your estate planning really meaningful. Use it to transfer your most important assets.

When you think of "estate planning,"  what comes to mind?  Perhaps how best to transfer wealth to the next generation.  Well, what about passing on your most important assets?  How about expanding your estate planning to include transfer of your insight and wisdom?  Why not prepare an ethical will?

An "ethical will" is sometimes also called a legacy letter, letter of instructions or a personal legacy statement.  It's a way of passing down what is meaningful.  Values, ideas, personal reflections, family stories.  Since ancient times people have shared stories, wisdom and blessings with future generations using a written statement.

An ethical will can take many forms.  It might be a single letter.  Or it might be separate letters to different family members.  Today it might also be a video, a Power Point, or an audio recording.  And if you want help, companies have been formed to help you prepare it in any of these formats.

I started writing one myself about ten years ago (even though I'd never heard of an "ethical will.")  I just began spending a few minutes every morning writing a letter to my daughter, Hannah, so she'd know more about me and our family if something happened to me.  It became what I started calling my "book" for her.  

It starts with a chronology beginning in 1900 when both my grandfathers were born. I have a section on people from my life (particularly relatives Hannah didn't know), a section on my dogs (of course!), a section on the "big" issues we face in life, a section on me (what I consider my strong and weak points and highlights of my life), and one on Hannah (what is so great about her).  Over time it somehow has grown to 168 pages.

Why write an ethical will?  It's a way to pass down what we value so the family can keep the values alive. My grandma Hannah very successfully ran several nursing homes.  She always had a Cadillac, and she traveled alone to Norway twice in the 1950's.  Her generosity to the family was huge: she gave my dad a down payment for a farm, and she sent me spending money at college.  I want my Hannah to know about her great grandma (and be proud of her, as I am).

An ethical will can also be practical, sharing ideas on how to protect, use and grow the family's wealth. In my practice advising family businesses I have many times heard young family members faced with a business decision remind one another about what Mom or Dad said when faced with a similar issue years before.  It can make a real difference.

The biggest reward for writing an ethical will may be for the writer.  The process gives you an opportunity to reflect on your life.  It can provide a deeper sense of meaning and peace of mind.  It helped me sort out conflicting ideas of how I felt about several important people in my life.

So, how do you draft an ethical will?

You just start jotting down some ideas.  Then, you prepare a simple draft.  It might be one page.  That's okay; it's a start.  And if you leave that one page document for your family, I guarantee that they'll treasure it.

It might be easier if you address it to one person like I did.  Or you might imagine you're having a conversation with an ancestor.  The questions you'd want to ask him or her are likely the same ones your family would like to ask you.

Of course, preserve the original, make copies, and make sure your family can find it when you're gone.

The most important thing?  Start now!


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