What some people are referring to as an ethical will isn't a legal document or something that governs how your assets are distributed to heirs via your estate. Instead, it's a document you leave behind that helps support your legacy by ensuring your loved ones, heirs and friends fully understand your values and who you actually were. While these are things it's best to communicate during life, an ethical will letter can be your last chance at cementing the communication.
Why would you want to take time to do such a thing? According to a financial adviser, leaving behind such a document actually follows a traditional that is centuries old. It's seen as a sort of love letter to those who survive you and is also a good place to put information about your feelings for them, providing them with some comfort during a difficult time.
An ethical will lets you share your life story or philosophies in a lasting way. Memories can fade over time, and even those who remember you fondly might not always get your values or legacy exactly right. This type of letter keeps your exact values clear.
While you still need legal vehicles such as a formal will or trust to ensure your estate is executed as you would see fit, an ethical will can stand alongside those documents to inform administration decisions or later decisions by heirs who have inherited assets or money. While it's not enforceable, an ethical will is something many heirs would consider when making those decisions. To understand how an ethical will might work alongside traditional estate planning, talk with your estate planning attorney.
Source: USA Today, "Be sure not to die without having written a love letter to your heirs," Robert Powell, March 01, 2017