6 reasons every advisor needs an ethical will

Legacy-building has two aspects: work and personal. In the office, advisors should first build a succession plan. This plan should also incorporate the advisor’s ethical code so that those who take over will (hopefully) continue to run the business with integrity.

At home, advisors should document and pass along their values to their families. This presumes a lifetime of instruction and motivaton, capped by the writing of a so-called ethical will. Unlike regular wills or trusts, which define how assets are conveyed to heirs, an ethical will conveys intangible values and guidance to one’s family. Since its format isn’t legally prescribed, it can be harder to develop than a will or trust, but equally beneficial.

Difficulties notwithstanding, advisors should consider writing an ethical will — also known as a legacy letter — for six reasons. According to Andrew Weil, an expert on healthy aging, ethical wills serve to:

• Provide a vehicle for leaving something behind, for being remembered.

• Help you document your history and stories for others to learn from in the future.

• Provide an opportunity to clarify your values before passing them on.

• Produce self-awareness and understanding.

• Give you the chance to accept past mistakes and to come to terms with your mortality.

• Create a fulfilling sense of completion and accomplishment.

Now, summarizing a lifetime of experience and conveying your most deeply cherished values to your family in one document can be daunting. But here are some pointers to get you started:

• Think about the essential wisdom you acquired over the course of your life. Write it down and pass it on.

• Recall the formative experiences that shaped your personality and values. Share those stories.

• Reflect on the blessings you’ve had in life. Enumerate and recognize for them.

• Discuss the key challenges you overcame in life. Provide guidance to your children for surmounting their own challenges.

• Consider what you learned from your parents. Pass that knowledge on to your family.

• Express your hopes and dreams for your children’s future.

• Decide whether to share your document now or upon your death.

• If all goes well, consider encouraging your clients to do the same. This can be helpful for encouraging the sound stewardship of inherited wealth.

In short, there is no right or wrong way to create an ethical will. Just write from the heart and capture your thoughts in a format that’s meaningful and motivating to your family. By transmitting your ethical values in this fashion, you’ll not only help to shape your children’s lives, but also those of their children, grandchildren and great-grandchildren. Now if that’s isn’t a supercharged legacy, I don’t know what is!