What is an Ethical Will?

First Party & Third-Party Ethical Wills For Trustees

Unlike traditional wills that transfer worldly possessions, an Ethical Will bequeaths values, ideas, and personal reflections to family members and other loved ones.  An Ethical Will provides the writer a way to live on after death in the hearts and minds of loved ones and friends.

There are many reasons for writing an Ethical Will.  Here are some of them:

1. We all want to be remembered, and we all will leave something behind.
2. It helps you identify what you value most and what you stand for by articulating what we value now, we can take steps to insure the continuation of those values for future generations.
3. It helps us come to terms with our mortality by creating something of meaning that will live on after we are gone.

In sum, an Ethical Wills provides a sense of completion in our lives. An Ethical Will is not an easy thing to write. In doing so, one confronts oneself. One must look inward to see what are the essential truths one has learned in a lifetime, face up to one's failures, and consider what are the things that really count. Thus, an individual learns a great deal about himself or herself when writing an Ethical Will.

Third-Party Ethical Wills For Successor Trustees

A Third-Party Ethical Will is a way to give your successor trustee guidance on how to make discretionary payments to your children and beneficiaries.  For example, only buy an auto for my high-school age son or daughter if they have a "B" average.  Or, if you suspect substance abuse, request that the successor trustee only make discretionary payments if the child tests clean on a quarterly drug test.  Finally, you might use it to suggest a cost sharing arrangement with an ex-spouse.

Another use of a Third-Party Ethical Will is to set the terms of compensation for your successor trustee.   By law,  successor trustees are entitled to "reasonable compensation."  This may be too  open-ended for some trust-makers.   Thus,  you could use a Third-Party Ethical Will to suggest what is reasonable to your successor trustee and family or why you picked a particular family member to serve as trustee.   This may eliminate hurt feelings later and possible disputes between family members.  These Wills are of particular significance with setting up a SNT trust.

The above is only a short list of possibilities--the uses of third-party Ethical Wills to fine tune your wishes are  unlimited.  It can add flexibility to your estate plan without overly encumbering it.