Ethical Will

One Dozen Must-Have Documents

To make sure that your wishes are carried out, you’ll have to do your homework. Make sure that you cover these most important documents.

The last thing you want to do, is leave a bureaucratic mess for your loved ones when you die. Not only will it cause the family stress during a difficult time, it could change how your family thinks of you. That should be more than enough reason to get this done in advance!

MP900398819US News & World Report’s recent article, “12 Documents to Prepare Now for Your Heirs,” says that when people don't have their paperwork ready, it can be a huge headache for the family. A family can be left with all kinds of paperwork to sort out while dealing with grief. Even worse, heirs may forfeit life insurance proceeds and tax deductions or overlook accounts they don't know exist. That's why it's critical to have important documents ready for loved ones. Here are the documents you should start preparing right away:

A will. This is a legal document in which you name an executor to carry out your wishes, heirs to receive your assets and a guardian if you have minor children.

A letter of explanation. Your will stipulates how assets are to be divided. However, a letter of explanation can provide the reasons for these decisions. This can be helpful, if the estate is to be divided unevenly between children.

List of financial accounts and beneficiaries. Keep a list of all your finances, such as bank and retirement accounts and brokerage funds. Each may have a designated beneficiary or transfer on death provision, known as a TOD. A person who’s named as a beneficiary or TOD designee automatically will receive ownership of the asset after you die. Make sure you keep these beneficiary designations up-to-date.

Personal inventory. Most wills distribute personal property in vague terms, like designating jewelry to one person and household goods to another. To be certain that nothing significant is overlooked, create an inventory of personal items. This inventory can also list items that may be stored in another location, unbeknownst to your family.

Power of attorney. This form is an important document for your family, if you become incapacitated because of an illness or accident. A power of attorney allows a designated person to make decisions on your behalf. One form is for financial decisions, and another is for health care.

Life insurance policies. Your family can miss significant life insurance benefits, if they don't know you have a policy, or it’s been lost or misplaced. Keep records of your life insurance plans and place it with your financial records.

Real estate records. Add deeds, assessments, mortgage statements and property tax information to the documents you've prepared for your heirs. Collecting the records for them in advance will make their lives easier.

Tax returns. List the name of your CPA or tax preparer, if you have your taxes professionally done. He or she can help your family with filing final tax returns for your estate. If you file your own returns, print a copy for your files and record any login information for online tax preparation services.

Logins for accounts. Create a list of your usernames and passwords for financial accounts, email, and social media and keep it where heirs can access the information.

A digital estate plan. Some states recognize digital estate plans as legally binding. However, even if it isn’t, it can be a great resource for your family. A digital estate plan states what will happen to your digital assets, like your social media accounts, websites, digital photos, intellectual property and other files and documents. Within your plan, you can name a digital executor and list those you've named as legacy contacts on specific platforms, such as Facebook and Twitter.

An ethical will. This letter describes what you'd like remembered as your legacy, such as passing down values. An ethical will can be used to share memories or to impart wisdom.

Your final wishes. If you've made prearrangements for your funeral or cremation, place that information with your will and other end-of-life documents. Your final wishes should also include information about organ donation, pet care and who should be notified of your passing.

Distilling a lifetime into a dozen documents is not an easy task, but it is necessary. Your loved ones will appreciate your doing the heavy lifting, and it will give them the room they need to grieve their loss.

Reference: US News & World Report (October 4, 2018) “12 Documents to Prepare Now for Your Heirs”

If You Don’t Have a Will Yet, You Should Start Now

It’s understood that everyone needs a will. However, many people put it off. Don’t be one of those people. Your family will remember, and it won’t be a happy memory!

Celebrities aren’t the only ones who fail to plan for their passing. The difference is, their failures can become instructive for the general public. If we don’t have a will, only our family will know how much time, expense and stress occurs because of a failure to plan.

Wills-trusts-and-estates-coveredMerrill Lynch and the consulting firm Age Wave found in their recent survey that about 50% of study participants age 50 and older didn’t have a will.

The Minneapolis Star Tribune’s recent article, “How to get started on making a will,” reported that many  people don’t care to talk with close family members about important financial topics, like their level of financial security, plans for living arrangements in retirement, inheritance or long-term care.

The Merrill Lynch/Age Wave report, “Family & Retirement: The Elephant in the Room,” explains that some of this is due to time constraints and that people say they’ll do it eventually.

However, it’s easy to get started. You can draft an ethical will, also known as a values statement or letter. Do this in the next few weeks or month. The thought is to capture for your immediate family, as well as your grandchildren and great grandchildren, what you want them to know about your values, what mattered to you in life, what traditions you hold dear and how you’d like the world to become a better place.

Creating an ethical will begins with a family conversation. Once you begin recording your values and discussing them with your family, it’s a short hop to discussions about your estate plan.

A great benefit of starting the dialog with an ethical will, is that there’s less pressure on the family and more time to become comfortable with the topic.

These discussions will lead you to finally meet with an estate planning lawyer to write your will.

However, don’t stop with a will. You also need a power of attorney and a medical power of attorney, so that a trusted family member or friend can make decisions on your behalf, if you should become incapacitated.

It may be easier, if you start with a discussion about values and your legacy. However, make sure to take the process to completion, so that your family is protected. You will have done the right thing.

Reference: Minneapolis Star Tribune (September 8, 2018) “How to get started on making a will”

Do I Need an Ethical Will?

An inheritance is often more than just assets.

If you want to be remembered as the person who made sure your heirs had all the information they needed about what you wanted, for funeral arrangements as well as what to do with Great Aunt Joan’s diamond bracelet, you might want to consider writing an ethical will.

25240245194_9cde86a5e5_oAn inheritance is often more than just assets. Family heirlooms, art, treasures from global adventures and stories, are also things that families share. When you prepare an ethical will, sometimes known as a “living letter” or a “legacy letter,” you give your children the ability to know what you want them to do with your belongings, and why.

Investment News’recent article, “Advisers use ethical wills to look beyond client assets,”says that a legacy letter helps the writer explain to younger generations his or her reasons for setting up the will in a certain way and what they hope to accomplish through the estate plan. In writing the letter, the donor is also adding to the probability that his or her wishes will be followed.

Some don’t like the term ethical will and prefer to call it a legacy letter.  However, the purpose is the same. Regardless of what it's called, the ethical will is simply a letter.

It’s not a binding legal document.  It is often written to accompany a formal will.

An ethical will can help uncover character assets and the values that a person holds dear. It can explain that what they have to pass on to loved ones, can be much more valuable than finances.

Even if the letters are directions about assets, they will by their very nature be personal, and your way to send a final message to those you love. You want to share your goals for your estate, and likely, your hopes and dreams for your family when you are gone.

Reference: Investment News (June 19, 2018) “Advisers use ethical wills to look beyond client assets”

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