Ethical Wills
By: Amos Goodall
The essence of estate planning is to provide for what happens after death. This may mean who gets the money, but for many people, the legacy the want to leave behind for future generations relates more to to personal values, beliefs, blessings and advice.
Certainly property considerations are a major factor, and minimization of transfer taxes as a result of death drives many estate planning packages. However, as Congress reconsiders Federal Estate Taxes, it becomes less important for most people to avoid the payment of taxes, since the vast majority of states will be under the Federal threshold. If an estate is under the threshold for Federal taxes, while there may be State tax considerations, there will be no Federal bill.
Few estates will be subject to Federal taxes. In Pennsylvania, for example, the Department of Revenue estimates that for decedents who died in 2000, if the threshold of $3.5 million (scheduled to be implemented in 2009) were in effect, there would only have been 327 estates with tax due and owing. (One wonders why it is so important to benefit the families of such a small number of wealthy decedents, at the expense of the general public, given all of the other financial challenges facing Congress today.)
Transferring property, however, is only one of the functions of estate planning. Many persons want to pass more along to their descendants.
Barry K. Baines, M.D. author of Ethical Wills, Putting Your Values On Paper, noted, "When my father was diagnosed with lung cancer in 1990, I asked him to write a letter about the things he valued. About a month before he died, my dad gave me two handwritten pages in which he spoke about the importance of being honest, getting a good education, helping people in need, and remaining loyal to the family. That letter - - his ethical will - - meant more to me than any material possession he could have bequeathed."
Reference to ethical wills are found in the Bible (Genesis, Chapter 49, when Joseph gathered his sons around his deathbed and in Deuteronomy, Chapter 33, when Moses bade his farewell to the children of Israel) and can also be found in early religious and spiritual teaching in other cultures.
In ancient times, most people had little opportunity to control the distribution of their property, since this was governed by custom and law, but they were free to speak their minds as it related to their "moral" assets. Ethical wills were particularly advantageous outlets for women, since archaic rules usually prevented them from writing a legal will or dispensing property.
In considering an ethical will, I counsel clients to imagine, a great uncle or grandmother or some other ancestor who figured prominently in the clients’ family history. What would the clients want to ask this person if they had gotten an opportunity to meet them. I then ask the clients to imagine what someone fifty or more years from now would like to ask them. This, in essence, is the subject of an ethical will.
There are several methods of writing such a document. The most important feature is someone’s statement of values and beliefs, how these have been put into effect for their lives, and their hopes for the future.
An ethical will can be short or long; it can be handwritten, typed, or recorded electronically. Although it is not a "legal document" recognized by the Pennsylvania Probate Estates and Fiduciaries Probate Code, it is, of course, an excellent source of information as it sets forth a person’s deepest thoughts in a non ante litem motam environment. Some persons share their ethical wills with members of their family when they are still alive. Others ask that their ethical wills be read at their funerals or deposited in the archives of their churches or other organizations. What is important that they be accurate, because they could end up being used, as well, in the interpretation of the financial wills as well.
Finally, ethical wills be reviewed and renewed from time to time, because as circumstances change, how one defines one’s ethical thoughts can become more refined.
Rabbi Jack Reimer, in So That Your Values Live On–Ethical Wills and How to Prepare Them, notes that the preparation of ethical wills forces people to confront the ultimate choices they make in life. "They can make people who are usually too preoccupied with earning a living stop and consider what they are living for."
What a precious gift it would be to your children, grandchildren and to future generations to know answers to questions like these:
Have I fulfilled my purpose?
What will I be remembered for?
What kind of legacy have I passed along to my family and others?