Saturday, November 04, 2006

I Don't Like the Term "Ethical Will"

But don't get me wrong.

I think that leaving a personal testament or statement of values, beliefs and advice to family is a wonderful idea, with a long, venerable tradition. I refer you to some good posts on this topic by Andrew Ewalt, entitled "Preserve Your Legacy of Values," and by Clark Allison, entitled "Ethical Wills - Passing On Your True Legacy," as well as an American Bar Association article by Scott E. Friedman and Dr. Alan G. Weinstein, entitled "Reintroducing The Ethical Will: Expanding the Lawyer’s Toolbox."

My beef is with the terminology. I think of the term "will" narrowly as a document in which you can appoint executors and trustees, guardians for your minor children, and provide how you want your assets distributed. Those are the main, if not exclusive, purposes of a will. Your will is a formal legal document, which in my view should be drafted by a lawyer who practices estate planning law. In British Columbia, there are strict technical requirements for making a valid will.

An "ethical will" is quite different. It is not intended as a legally binding document. It is not a formal document. Probably, a lawyer is the last person in the world whom you would want to draft your personal statement of values, beliefs and advice.

What would a lawyer drawn ethical will look like? Consider this:

"This is the last ethical will and testament of me, Stanley Rule, of
Kelowna, British Columbia.

1. I revoke all of my prior ethical wills and ethical codicils.
2. I appoint my wife, Michele Rule, my ethical trustee, but if she is
unable or unwilling to act or continue to act, I appoint ....
3. I give all of my ethics to my trustee on the following

I am not sure how I would draft the equivalent of the clause in which the trustee is authorized to pay my debts. Do I require my ethical trustee to set aside a sufficient amount of my good qualities to offset my bad ones? I suppose my biggest fear is that I will then end up with an insolvent ethical estate, with nothing to pass on to my family.

Kidding aside, I find the term "ethical will" confusing. It is not a substitute for a will. It is not any more ethical than a will. It is a different thing from a will, with a different function. I don't find the term to be self-explanatory.

Someday, when I am older and wiser, I hope to prepare a document setting out my beliefs and values for my family. But, I won't call it an "ethical will." I will probably just call it "a letter to my family." I might give it to my family before my death.

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