If you feel strongly enough to commit your values to writing, why not discuss them with your family now?
An ethical will is essentially a letter from you to your family that articulates your values and beliefs, relates the life lessons you hope to pass on and spells out your aspirations for your family.
In theory, writing an ethical will sounds beneficial and fulfilling - and the fact that more investors are asking about it reflects the growing realization that one's legacy consists of much more than the tangible things we leave to our heirs. But in practice, ethical wills may represent a missed opportunity.
Assessing Effectiveness
On one hand, writing an ethical will can be an extremely valuable exercise if your main purpose is self exploration - in other words, if the exercise is primarily directed inward.
Indeed, many proponents of ethical wills emphasize the opportunity they afford to learn about ourselves, reflect on our lives and re-evaluate what is important to us.
If your purpose, however, is to perpetuate your values or beliefs - largely an outward-looking enterprise - then an ethical will might disappoint. When the document is read just before or after a death, the views expressed can seem like a parental decree. Some family members may even be tempted to wonder why, if it was so important for the author to say these things, he or she didn't share them while still alive.
Top-Down Tone
To take it one step further, an ethical will's effectiveness can be dubious even when it's circulated during a writer's life - unless it is part of another process that invites communal discussion and contributions.
Ethical wills, by their very nature, speak with a single voice, so it's hard to avoid the impression that the author is trying to impose his or her values, instilling them from the top down rather than helping them take root from the bottom up.
Let's look at a real-life example of a wealthy family that discovered this while creating a mission statement for their business.
The mission statement was created in the executive suite and pushed down into the employee ranks.
In short, it never took - and the family quickly learned that their employees needed to feel a sense of ownership, or the mission statement would never resonate.
When the senior family members decided it would be worthwhile to create a family mission statement, they made the process as inclusive as possible.
Every family member participated fully, weighing in on questions like what they valued deeply and what they hoped to accomplish as a family. This process sparked a rich and deeply rewarding series of intergenerational conversations.
An Alternative Solution
This family's experience not only is instructive; it illustrates that a family mission statement can be a much more effective alternative to an ethical will. At times communal conversations about family values and goals are daunting at the outset, making a simple letter seem like an easier option. But it is these very conversations that can enhance a legacy more than any letter from the grave ever will.
For more information, e-mail william.a.creekbaum@smithbarney.com or call 689-8700.
Smith Barney does not provide tax and/or legal advice. Please consult your tax and/or legal advisors for such advice.
• William Creekbaum, MBA, CFP, a Washoe Valley resident, is senior investment management consultant of SmithBarney, a financial services firm serving Northern Nevada at 6005 Plumas Street, Suite 200 Reno, NV 89509.