Bequeathing wealth and valuables to children is one matter, but conferring values is quite another challenge. Large sums of money and numerous assets in a family estate can easily obscure what many of the people who create wealth consider far more important: handing down their guiding principles, ideals, and beliefs.
Such a problem faced the 48-year-old president and CEO of Stonyfield Farm, the New Hampshire–based yogurt maker. To Gary Hirschberg, who built the company with environmental awareness and social responsibility as cornerstones, these principles are as essential as the bottom line. Stonyfield Farm was the first yogurt maker to pay farmers not to use growth hormones, and the company donates 10 percent of its profits to ecology and conservation causes.
Through his will, Hirschberg controls how his assets and those of the company will be distributed, but the idea of dying without the assurance that his three children understood the values on which the company was built weighed heavily on him. “[My will was] very boring and dry and legalistic and was much more about what can’t be done,” says Hirschberg. “It’s very narrow, and therefore not at all expressive of me. I kept wondering where I would appear in this document.” The answer, he discovered, was nowhere. If he wanted to record his personal thoughts and feelings, he would need to do so with another document, what is known as a legacy statement or an ethical will.
The desire for a parent to communicate his or her hopes and wishes—and perhaps regrets and apologies—is hardly a recent phenomenon. The Bible is replete with examples. Jacob, for instance, bestows blessings on each of his children before he dies, and Jesus deliv-ers these parting words to his disciples: “Love each other as I have loved you. Greater love has no one than this, that he lay down his life for his friends.”
A post–September 11 awareness of life’s fragility has prompted a surge in the self-reflection that leads to writing an ethical will, according to estate planners. “[Ethical wills] are not for the weak of heart,” says Carol Kauffman, a Boston-area psychologist. “You have to sit down, think of your life as a finite experience, and try to convey in writing what is most important to you.”
At its foundation, an ethical will is simply a document in which the writer details values, beliefs, and other personal insights for his or her descendants. “It’s not only who gets the grandfather clock, but who was grandfather?” explains Tom McMillen, a Denver attorney who specializes in estate planning. “What did he believe in, and what were his hopes and dreams for his heirs?”
No statistics on the number of ethical wills in existence are available—many may be known only to family members and, undoubtedly, others are known only to the authors. Because the writer decides when the appropriate time is to share an ethical will with family members, he or she may deliver the document personally or have it read with the material will.
If the writer decides to disclose the ethical and material wills simultaneously, experts agree that the documents should remain separate. An ethical will, unlike a material will, is not a binding, enforceable document. Its contents cannot be objectively quantified, and for that reason it should not be connected to the material will. An ethical will can, however, help explain—either directly or indirectly—the thought process behind the terms of the material will.
For example, had Ruth Lilly written an ethical will, it could have explained to her heirs why she bequeathed stock worth $100 million to Poetry magazine. Instead, relatives were left to wonder why she left such a large sum to the 12,000-circulation periodical that had repeatedly rejected poems the heiress to the Lilly pharmaceuticals fortune had submitted.
For Hirschberg, an ethical will suits his need to leave his children a tangible handbook for living. Unlike his material will, it allows him the opportunity to outline his values and, says Hirschberg, “let the kids know not only what they were inheriting but how it had even come to be.”
When he began composing his ethical will—a document that, he says, is a work in progress—he discovered that the process subtly changed his outlook on life. “It made me much more conscious of taking advantage of being alive,” he explains. “And it got me really focused on what messages the kids were or weren’t getting.”
Sometimes it is a child and not the parent who introduces the notion of an ethical will. Barry Baines, a Minneapolis-area physician, unknowingly stumbled upon the idea during a visit to his ailing father in Florida. While they were talking, Baines asked his father to write him a letter describing the things that were most important to him during his life.
“He kind of looked at me funny and said, ‘What do you want me to do that for?’ ” recalls Baines, acknowledging that, at the time, he did not know the answer. What he did know was that his father’s condition was grave and that the letter was something he wanted to have.
About a month before his father’s death from lung cancer, Baines received the letter. In it, his father reflected on his life, his pride in the accomplishments that he and his family had achieved, his regrets, and his hopes for the future. The younger Baines later discovered that his father wrote similar letters to other family members. When he asked his father to write the letter, Baines did not realize that it would become one of his most cherished possessions.
At work one day a couple of years later, Baines encountered a hospital chaplain who was counseling a terminally ill patient. Facing his own mortality, the patient had declared that his life had been meaningless. Baines recounted to the chaplain the story of his father’s letter and suggested that the patient write his own reflective missive.
The result was dramatic. “His spiritual suffering totally disappeared,” marvels Baines. “We were just amazed at how powerful this was.” Baines has since published resources devoted to ethical wills, including a web site (www.ethicalwill.com) and a book, Ethical Wills: Putting Your Values on Paper (Perseus Publishing, 2001). “For some people, it’s hard to say these things,” says Baines. “It’s easier to first write them down and then share it.”
The appeal of an ethical will may be stronger in affluent families, says Ken Wheeler, a tax attorney and estate planner in Winter Park, Fla., particularly if money has played a divisive role in intrafamily relationships. Most financial advisers are familiar with individuals who earned their fortunes at the expense of relationships with family members. Often, monetary rewards lose their importance as people age, and ethical wills offer an opportunity to address past failings. “The older they get,” Wheeler explains, “the more they realize that the pursuit of money and having money is not as important as other things.”
To experience the full benefits of an ethical will, experts advise, the writer should share it with family members while he or she is alive. The existence of the will may surprise some family members, but discussing its contents creates an opportunity to reach common ground with the heirs and to address preemptively and amicably any dissension that could ensue after the will writer’s death, says David Levin, an attorney in Oakland, Calif.
In such a way, Levin adds, ethical wills—despite a lack of legal clout—can help prevent legal action after the death of the writer. “I guarantee you that this process can be used many, many times to avoid that type of conflict and litigation,” he says. If, for instance, J. Paul Getty had authored an ethical will, it may have saved his family from numerous lengthy lawsuits to acquire his estate. Instead, without any warning or any explanation, the heirs learned that the oil baron had left the bulk of his estate to the museum housing his art collection.
It is widely assumed, however, that Getty’s will was in part an act of retribution against his family. If that is the case, then perhaps it is best that he did not compose an ethical will. Exacting revenge on heirs, experts say, is not the purpose of ethical wills. “Don’t use it to beat up on somebody from the great beyond,” cautions McMillen. “That would be an unethical will.”
Nor should ethical wills be used to script the lives of heirs, says Baines. “I have seen, at times, people use their ethical will along with the family wealth, ”he says. “They actually tie it in with regard to some trust, saying, ‘Well, you can get the money if you become a doctor or a lawyer.’ ”
Such occurrences may be infrequent, but they are a natural temptation when you consider that the majority of ethical wills are written not by lawyers or estate planners, but by the person leaving the estate. The do-it-yourself nature is maybe the most attractive feature of an ethical will, because it casts the document in an extremely personal light. “You don’t have to be Ernest Hemingway to write an ethical will,” adds Baines. “This is the voice of the heart.”
Hirschberg agrees, saying that heartfelt thoughts—not the sterile legalese in a material will—are exactly what should form the heirs’ final impressions of their loved ones. “I think that it is kind of tragic that, as a society, we’ve somehow allowed ourselves to see that the last living testament is something that’s just filled with all of the things you can’t or shouldn’t do.”
Denver Attorney Tom McMillen advises clients who desire to leave family members a personal message to follow a formula that goes by the acronym ACTS. Although ethical wills are personal, heartfelt expressions rather than rigid legal documents, ACTS can help provide structure and a starting point.
A: Adoration. Write about the traits in your loved ones that you adore and why. Be specific about how these qualities have been influential in your life.
C: Confession. This is the chance to make amends for past wrongs. Upon self-reflection, most writers welcome the opportunity to clear the air. “It’s an opportunity to say, ‘Maybe I wasn’t the father or the husband I could have been. Maybe I could have done better,’ ” says McMillen. Many writers ask for forgiveness, which is something not found in a material will.
T: Thanksgiving. Recognize the events—and the people—in your life that you are thankful for. These have shaped the person you have become, and this is your opportunity to acknowledge them.
S: Supplication. Put forth your hopes, dreams, and wishes for your heirs. Outline the values you tried to embody in your life, and stress your desire to have your descendants carry them into the future.
The following suggestions can help you create a document that will be treasured by your family long after you are gone.
Do not be rash. Experts suggest that you plan your ethical will as carefully as you plan your material will. Take your time, and avoid writing when you are unhappy with a family member. This document may be passed down through several generations, so consider topics that will be of enduring importance.
Reread your ethical will annually. “Our perspectives change,” says attorney David Levin. “Sometimes they change internally because of the way we look at life, and sometimes the change is forced upon us because those around us change—sometimes for the good and sometimes for the bad.”
Recognize when the time is right. Material wills are often written in the face of life-altering events, such as the birth of a child or grandchild, a marriage, or a health scare. Ethical wills can spring from these same events. One caveat: If your children are very young, your ethical will probably will be a work in progress because you have not seen the people they will become.
Keep it separate from a material will. Do not use an ethical will to make monetary demands upon your heirs, experts stress. It is permissible to ask that your values be considered: “I hope my tradition of supporting the arts will continue.” It is not advisable to require money transactions: “It is my wish that $250,000 be given annually to the Harvard Business School from the family trust.” Bequeath gifts to a specific charity or organization in your material will.