A letter of instruction, or letter of intent, is essential to estate planning. It provides background information and describes the plan you have in mind. Unlike a will, a letter of instruction is not legally binding.
It can be personalized to provide easy-to-read guidance and is helpful for your loved ones to understand the intent of your will or trust once you pass. This document allows you to communicate anything you would like regarding managing your affairs or personal sentiments once you pass.
What Should Be Included?
Letters of instruction are highly individualized, and what you include is completely up to you. There is no single piece of information that must be included. However, there are various things that should be considered when creating a letter of intent.
Asset information
Your assets include anything of value. Details on where to find and how to access your assets are a crucial part of a letter of instructions. For example, if you have a safety deposit box, you should include the passcode, location, and contact information if assistance is needed.
You should consider the following assets when creating a letter of instruction:
- Savings accounts
- Checking accounts
- Retirement accounts
- Investments
- Real estate
- Vehicles
- Businesses
- Art, jewelry, collectibles, or anything else of value
Insurance Information
Details regarding your life insurance policy are important to include in your letter of intent. You should include information such as the amount of the policy, the provider, and the beneficiary’s contact. Other insurance policies, such as a home and car, should also be included to help loved ones cancel, update, or manage the policies.
List of Debts
The inclusion of debts is just as critical as assets. Be sure to list each debt, including the amount owed and who it’s with. This should also include recurring bills, subscriptions, or services. Consider the following when creating a list of your debts:
- Car loans
- Mortgages
- Credit cars
- Recurring subscriptions
- Recurring services
- Utilities
- Cellphone plan
Important Contacts
It can be beneficial to include a list of important contacts. These contacts may include the following.
- Accounts
- Financial advisors or managers
- Executors
- Accounts
- Estate planning attorneys or lawyers
- Insurance agents
- Bankers
Location of Documents
Executors or loved ones may need to have access to any significant documents. Make a list of these documents and where to find them. Common documents to include are as follows:
- Social Security cards or numbers
- Deeds
- Vehicle titles
- Tax information, documents, and returns
- Birth, marriage, and divorce certificates
- Citizenship paperwork
- Other estate planning documents
Digital Information and Assets
We live in a highly digitalized world, and many of us have digital assets and information that may need to be accessed. Things such as music libraries, photo archives, social media accounts, and personal websites may need to be addressed. Be sure to include usernames, passwords, and what you would like done with your digital assets and information.
Burial and Funeral
Although your will may contain instructions pertaining to your burial and funeral, you can include more details for your loved ones in your letter of intent. For example, information on what outfit you would like to wear, the type of music you would like played, who you would like to write your epitaph, or how much you want to spend on services can all be specified. You may also include your preference for memorial donations in lieu of flowers.
Sentiments
Because a letter of instruction is not a legally bound document, you may include anything you’d like to communicate to your family or loved ones. This can include heartfelt letters or other sentiments for them to have upon your passing. This also allows you to express any final words or how you would like to be remembered, which can be extremely meaningful to your loved ones.
While a letter of instruction is not a legally bound document or a substitute for a will, it is a key component to include in your estate plan. Including clear instructions will give you peace of mind and help your executor significantly.
Additionally, sentiments can help your loved ones feel at ease upon your passing.
