Estate planning can seem overwhelming. There are so many documents and details to consider when preparing for the future. However, having the right plan in place provides peace of mind that your wishes will be honored if you become incapacitated or pass away. One important piece of that plan is a letter of instruction.
This informal guide offers your loved ones invaluable guidance on handling your affairs during difficult times. It works hand in hand with core legal documents like wills and trusts to tie up loose ends.
What Exactly is a Letter of Instruction?
A letter of instruction is a personal, non-legal document outlining your preferences and providing instructions to loved ones for managing your finances and affairs if you become incapacitated or pass away.
It differs from a last will and testament, which is a formal legal document dictating how your assets will be distributed after you die. A letter offers additional guidance to help your family navigate the complexities of settling your estate.
Think of a letter as your final wishes for your heirs. While not legally binding, it can provide invaluable guidance and direction when legal documents leave gaps.
Why Have a Letter of Instruction?
With all the formal documents involved in estate planning, you may wonder why a simple letter is necessary. There are several compelling reasons to make one part of your plan.
It Fills Critical Gaps in Legal Documents
A thoughtfully crafted letter can provide details that legal documents don’t cover. For example, you can include:
- Locations of important documents, valuables, and financial records.
- Login credentials and instructions for managing digital assets and accounts.
- Guidance for running a family business, managing properties, caring for pets, etc.
- Personal messages and final wishes for loved ones.
It Offers Peace of Mind for You and Your Heirs
Knowing you have guidance in place offers peace of mind that your wishes will be followed. Your heirs will take comfort knowing they can simply refer to your letter when needed.
A letter can help avoid disputes between beneficiaries by providing clear instructions upfront. It simplifies matters for grieving loved ones struggling to settle their estate.
It Complements Your Legal Documents
A letter works hand in hand with core legal documents like wills and trusts. It ties up loose ends and provides critical supplemental guidance.
Think of your letter as the final piece of the puzzle that pulls your estate plan together. It offers the human touch to complement the legal formalities.
What to Include in Your Letter of Instruction
Your letter should cover any information or guidance that legal documents don’t address. While contents will vary, here are some common sections to consider:
List of Accounts and Assets
Include a comprehensive list of financial accounts along with:
- Institution names and contact information
- Account numbers, balances, and other details
- Location of statements and records
Also, list physical assets like real estate, vehicles, jewelry, art, etc. Provide relevant identifying details and location information.
Digital Assets and Login Credentials
Provide login credentials and instructions for accessing and managing digital assets like:
- Email and social media accounts
- Online financial accounts and tools
- Cloud storage and backup files
- Subscription services and memberships
Personal Wishes and Instructions
Share your preferences on matters like:
- Burial or cremation instructions
- Charitable donations to make on your behalf
- Care instructions for pets or dependents
- Sentimental possessions and who should receive them
Key Contacts and Advisors
Provide names and contact information for your:
- Estate planning attorney
- Financial advisor
- Accountant
- Insurance agent
- Executor and trustees
How to Write Your Letter of Instruction
Follow these tips to craft a useful letter that clearly communicates your wishes:
Use Simple, Direct Language
Write conversationally, avoiding complex legal and financial jargon. Use first-person language and keep sentences and paragraphs short and direct. This makes your letter easy to understand.
Organize Logically
Group related information and instructions together under clear headings. Use numbered lists and bullet points to make your letter easy to navigate. Logical organization ensures readers can quickly find what they need.
Be Specific and Thorough
Include precise legal names, contact details, locations, account numbers, and step-by-step instructions. Don’t assume heirs will know what you mean – spell everything out clearly. Providing thorough details reduces confusion and prevents mistakes.
Personalize with Stories and Messages
Consider adding personal touches like family history, anecdotes, and messages to loved ones. This adds warmth and helps your heirs understand your wishes better. Personal elements make your letter feel more human.
Use a Template
Start with a letter of instruction template and customize it with your details. Templates provide helpful guidance on sections to include and language to use. They make the writing process simpler.
Keep it Updated
Review and update your letter at least annually and after any major life events. Details tend to change over time. An outdated letter can cause more problems than it solves.
Store Copies Securely
Keep original signed copies stored securely with your will and other estate documents. Also provide digital and physical copies to your executor and key heirs. Make sure they know the location. Easy access ensures your letter is available when needed.
Where to Keep Your Letter of Instruction
Store your letter of instruction in a secure yet accessible place. Some options:
- With your will and other estate planning documents
- In a fireproof safe or safe deposit box
- Encrypted digital copies shared with heirs and advisors
Wherever you keep it, ensure your executor knows the location.
Work With Estate Planning Professionals
While you can create a letter on your own, consider having estate planning professionals review it. An estate planning attorney can ensure your letter aligns legally with other documents. A financial advisor can help with asset details.
The right professionals make sure your letter provides maximum clarity and protection for heirs. They can also assist if you have questions or get stuck while writing.
If you’re ready to get started on your estate plan, including a letter of instruction, the attorneys at Stivers Law in Miami can help. Their lawyers guide you through the process with knowledge and compassion. Visit their website at https://miamiwealthplanning.com/ to schedule a consultation.
