Creating and implementing an estate plan is an important step to ensure that whatever you owned in life is passed on after your death in accord with your wishes (and not those of the state). It is prudent to work with your estate attorney, tax accountant, and financial advisor to plan strategically and determine the most advantageous method of achieving your desired goals.
At the core of this work is the desire to care for those people and causes that are important to you, but the legal documents can only go so far in helping you achieve this goal: they often give your executor very specific direction about the disposition of personal property, but allow your trustee wide latitude in making asset distributions to your beneficiaries. The latter is by design since the assets may last for a long time after your death, and circumstances may change for your beneficiaries – so you don’t want to hamper your trustee unnecessarily.
But the trustee could often benefit from direction, and it may also help your beneficiary to understand your intent. Enter the “legacy letter.” Also known as an ethical will, a legacy letter is not a legal document, but rather a personal statement from you that can provide additional context for your loved ones and those carrying out your wishes after you die. We encourage our clients to consider writing a legacy letter so that future generations can understand and appreciate their intentions and wishes.
The topics covered in a legacy letter can vary widely and are determined by the person writing it, but following are some general guidelines and possible areas to address:
- You can write letters to a spouse or child to share your values, hopes, and aspirations for their future. The letter does not have to be elaborate or extremely lengthy; rather it should be personal and heartfelt and maintain a positive tone.
- Consider sharing “your story” – some of the formative lessons you learned or key events that shaped your life and would be meaningful for future generations. For example: what did hard work teach you about life? Did you have any personal struggles and, if so, how did you face them?
- You can use the letter to explain the reasons you designed your estate plan the way you did. For example, Warren Buffet has been very public about his decision to give the vast majority of his fortune to charity, rather than to his children, so they will be resourceful, independent adults. You likely had a specific rationale for the decisions you made – this is an opportunity to explain your thinking.
- Letters can be written to be opened upon achieving certain significant milestones. It may be a comfort to the recipient to know you were thinking of them at these important moments in their life, despite not being present. We read one story about a man who, after being diagnosed with terminal cancer at a very young age, wrote letters to his infant daughter that she was to open at specific moments in her life (e.g., her 16th birthday, her high school graduation, her wedding, and the birth of her first child). Initially, the daughter opened these letters with a mixture of sadness and trepidation, but in time she grew to cherish the words of love and wisdom her father shared with her across the years.
You can choose, of course, to record an audio message or a video rather than write a letter. In all cases, the document should be kept in a safe location and the executor of your estate should be aware of its existence and know how to access it.
A member of your JDJ team can answer questions and provide guidance in the creation of a legacy letter.