So, you have an estate plan, including a will and/or a living trust and incapacity planning documents. This puts you ahead of many of your fellow Americans, and it means the mechanics are in place for securing your loved ones’ futures. But there’s one more thing you can do to help encourage a smooth transition in case of your death or disability – write a letter of instruction.
Unlike a will or a power of attorney, a letter of instruction is not a legally-binding document. However, the fact that it’s not legally binding doesn’t diminish its importance.
So, what exactly is it? It’s a letter you use to communicate all those little, practical details that might not be covered in your estate planning documents. It serves as a roadmap that allows your executor, trustee, or loved ones to better understand your final wishes and carry them out. For example, your letter of instruction might include:
- phone numbers of friends or colleagues to notify in the event of your death
- a complete list of your assets, including where to find items your executor or trustee might not easily be able to locate
- the contact information for your estate planning attorney, your financial advisor, and any other professionals who help plan and manage your assets
- the locations of important paperwork, like life insurance policies, stock certificates, deeds and titles
- the names, account numbers, locations, PINs and passwords for your financial accounts.
- an explanation of any items in your estate plan that might cause confusion, concern, or discord among your heirs
- funeral plans and wishes
- anything else you feel it’s important for your loved ones to know
Your estate planning attorney can help guide you in writing a letter of instruction, including making suggestions as to what you should include in your letter.