The results of a 2012 Allianz Life Insurance Study may surprise you. 86% of Baby boomers (age 47-66) & 74 % of elders (age 72+) agree that family stories are the most important aspect of their legacy, ahead of personal possessions (64 % for boomers, 58% for elders) and the expectation of inheritance for financial well-being (9% for boomers, 14% for elders).
These results do not vary greatly from their study of 2005, that indicated that family values and life lessons were indeed the most important part of legacy before financial assets. That study outlined the 4 pillars of legacy as being 1) Values and Life lessons 2) Personal Possessions of emotional value 3) Wishes and Directions to be fulfilled and 4) Financial Assets/Real Estate
An ethical will captures the non financial part of a legacy. which make for, alongside the financial assets leaving a legacy as opposed to an Inheritance. Ethical Wills are the intangible form of a legacy that can make a real difference to heirs and that’s perhaps why they are being talked about more often in recent years as part of overall wealth transfer planning. An ethical will is not legally binding or enforceable as opposed to a will or living will; it is more concerned with the sharing of principles, values , life lessons, family histories and guidelines that an individuals may want to be pass along to heirs. It can be an informal letter or a long autobiography or a book, or even a video.
A good read on the subject is by Susan Turnbull of Personal Legacy Advisors in her book, The Wealth of your Life: A step by step guide for creating your ethical will. Ms. Turnbull’s book provides an introduction to the concept of an ethical will and lays out a 5-step path for creating a written document or recording. Her website is also a valuable resource
From Ms. Turnbull:
“It is a heartfelt expression of what truly matters most in the client’s life….Whether a client actually creates an ethical will or not, it is a measure of value of recommending one…An ethical will opens a door for an advisor to start a bigger conversation about estate planning”
It seems reasonable that Financial Advisors who open up conversations about ethical wills may find that they are then able to better serve the next generation of their existing clients. It provides an opportunity to reach out to that next generation and reduce the risk that comes with the unprecedented intergenerational wealth transfer that has already started while doing “Good” for clients.
Overall, I think most of us understand, that we are all worth more than the money we leave behind and that’s why we have included a place for Ethical Wills inside LegacyTracker
Connect with us to find out about all of the important parts included in LegacyTracker
Here’s a sample and some additional information in the form of FAQ from John Kador’s article on Ethical Wills from wealthmanagement.org