Protecting your financial legacy and ensuring the monetary and physical assets you’ve amassed are properly transferred to the beneficiaries of your choosing is a cornerstone of estate planning.
An important first step in your estate plan is crafting a will to create a legally binding document that clearly defines your desires for your estate upon your death. Another key element of your estate plan is writing a letter of instruction to your heirs. This document provides a working roadmap for the people who will be settling the affairs of your estate and inheriting your assets. Think of this document as a supplement to your formal will to ensure your final wishes are clearly explained so they can be properly carried out.
What Is a Letter of Instruction
A letter of instruction (sometimes called a letter of intent) is an informal document and is not a legally binding instrument. However, it is important since it leaves behind instructions, arrangements, and other key information that typically is not part of your formal will. It’s also written in plain English rather than complicated legalese, so it’s easily understood by all affected parties.
Think of it as a letter of instruction, a means of final housekeeping, for the executor of your will and your heirs when you pass. You can say what you want, and you can say it any way you want.
What to Include in a Letter of Instruction
A letter of instruction can be invaluable if you have a lot of assets spread out across different states or in different places. Say, for instance, you have a small hunting cabin at your favorite lake. The cabin is part of your estate and likely has a designated heir in your will. But if you want your gun collection, camping equipment, and off-road vehicle that are stored there to go to someone else, you could include that information in your letter of intent.
Other information that’s an essential aspect of a letter of intent includes:
- Bank account information, including usernames, passwords, and PINs, as well as any safety deposit boxes that are in your name
- Contact information for your taxation, legal, and financial professionals
- List of key assets not mentioned in your will, their locations, and your wishes for how they are to be divided
- List of sentimental possessions, such as watches, rings, and other valuable jewelry, that you want to go to a certain heir or heirs
- Special instructions to donate any assets or possessions to a charity of your choosing
- Location of important documents such as titles to vehicles
- List of your current debt obligations, along with account and contact information, so those affairs can be settled or addressed
- Desires for rehoming pets, if necessary
- Desire for your funeral proceedings, interment of your remains, or organ donations
- List of people and their contact information who should be notified that you’ve passed if you wish them to attend your funeral
Since this document isn’t legally binding, you have the flexibility to include anything else you want in your letter of instruction. The goal is to incorporate as much helpful information as possible since you don’t have a say in matters once you have passed.
The Bottom Line
When writing your letter of instruction, include as much information about your estate and your assets as possible, and provide detailed instruction for how you want any assets not mentioned in your formal will to be dispersed among your heirs.
Your letter of intent doesn’t supersede the terms of your will. It can, however, go a long way toward alleviating familial infighting for some of your possessions, especially items that hold sentimental or monetary value. Once you have completed this document, sign and date it and keep a copy with other important papers or give a copy to the executor of your estate.
