When I prepare estate plans for my clients, they typically include six key documents. For more complex estates, the plan may also involve trust and/or business succession documents. However, to make estate planning as simple and the least chaotic for your loved ones tasked with fulfilling your wishes, I also recommend drafting another document: a letter of instruction.
What Exactly is a Letter of Instruction?
Think of a letter of instruction like an easy-to-read-and-understand summary shortcut for your estate plan’s executors and representatives. Its main purpose is to help guide the person(s) settling an estate through the process, step-by-step, in plain, clear language. The letter can serve as a cheat sheet of sorts. It’s not legally required and certainly doesn’t take the place of a valid will, but it’s a meaningful nod to those you have tasked with handling your affairs.
Your letter of intent doesn’t have to go by any specific form or outline, so some people tend to use it as a way of giving personal instructions and giving details beyond what is articulated in your estate planning documents. A useful letter of intent can include the following information:
- Location(s) of:
- Important papers such as birth certificates, any divorce/marriage certificates, citizenship papers, etc.
- Estate plan.
- Titles and/or deeds to real estate and rental property.
- Recent copies of all financial statements like tax returns and other potentially important legal documents.
- Safety deposit boxes and the respective keys.
- Tangible property that may not be readily accessible
- Names, passwords, account numbers, and PIN numbers for financial accounts.
- Social security number.
- Contact information for:
- Any debtors, including for mortgages, credit cards, and auto loans.
- Any professional fiduciaries who handle assets like attorneys, brokers, and bankers.
- Insurance coverage (particularly life insurance).
- Beneficiaries of the estate and other payable-on-death/transfer-on-death accounts.
- Instructions for the care of any pets. (You may also want to establish an animal care trust.)
Regular Updates & Safe Storage
Like your other estate planning documents, the letter of instruction should be reviewed annually and updated as needed. Because the letter of intent includes confidential personal information it should be stored in a secure place that can also be accessible by your estate plan’s executor.
But First, an Estate Plan!
Before you go about drafting a letter of intent, it’s important to place a priority on executing an estate plan that helps you meet your goals and define your legacy. My free, no-obligation Estate Plan Questionnaire (the first of the six key estate planning documents) is a great place to get started. Otherwise, contact me by phone or email with any questions and to discuss which estate planning strategies may be best for you and your family.
