Many parents spend a lot of time, energy, and money preparing estate plans intended to provide security for their children and grandchildren. While it's common for parents to conduct numerous discussions with advisers in order to create a plan that will transfer their estate as smoothly as possible, they often neglect to hold similar conversations with their children.
When planning to pass your estate on to your heirs, it is important to consider how they might handle the new responsibility of receiving an inheritance. Parents may believe that the inherited estate will be used responsibly to help their children and grandchildren pay for furthering their education; to make it possible for one parent to stay home with young children; to ensure a secure retirement, or to be put to other responsible, sensible uses. The assumption that children share the financial values of their parents, however, may not be valid. Many teenagers or young adults might prefer a sports car to a 401(k).
To communicate their values, may people write an ethical will, which basically states in a narrative form what is important to them and how their values were developed growing up and during their lifetimes. By sharing your values with your loved ones, it is hoped that they will continue on with the next generation(s). Many clients have shared with us that the ethical wills of deceased relatives are one of the most cherished and meaningful gifts they have ever received from a loved one. In fact, several clients have saved the writings of loved ones for decades and they serve as an inspiration during challenging life situations.
There is no right or wrong approach to ethical wills; the words simply have to come from the heart. Along with personal values and beliefs, we have seen clients share spiritual beliefs, hopes for future generations, life's lessons, forgiving others, or asking for forgiveness, among many other themes. After all, the money you leave will ultimately be spent; the values you impart may last forever. Read more