A Letter of Instruction may not have the legal standing of a will or trust, but it’s an invaluable document in your estate planning toolkit. It provides your heirs and executor with vital information, from where your assets are located to your funeral wishes, making the process of settling your estate smoother and less stressful.
What to Include in a Letter of Instruction
1. Funeral and Burial Wishes: Outline your preferences for your funeral or memorial service, burial or cremation, and any other specific instructions, such as religious or cultural practices
2. Location of Assets: Clearly outline where all your assets are located, including bank accounts, investment accounts, retirement plans, real estate, and other valuable property. This should include both digital and physical assets.
3. Insurance Policies: List all insurance policies, including life, health, long-term care, homeowner’s, auto, and any other coverage you have. Include the name of the insurance provider, policy number, contact information, and the location of the policy documents.
4. Debts and Liabilities: Detail any outstanding debts, such as mortgages, loans, credit card balances, or other obligations. Provide information on where the documentation is stored and any payment schedules that need to be followed.
5. Contact Information for Key Advisors: Provide a list of essential contacts, including your estate planning attorney, financial advisor, accountant, insurance agent, and any other professionals involved in your financial affairs. Include their names, addresses, phone numbers, and email addresses.
6. Passwords and Digital Information: Given the increasing importance of digital assets, it’s crucial to include information on how to access digital accounts, including online banking, investment accounts, email, social media, and other digital subscriptions. Consider using a secure password manager and providing access instructions in your letter.
7. Instructions for Personal Belongings: If there are specific personal items or family heirlooms that are not covered in your will but you want to direct to certain individuals, provide details here. You can express personal sentiments or the significance of these items, which can offer comfort to your loved ones.
8. Final Messages to Your Family: Consider including personal messages to your loved ones. This can provide emotional support and convey your values, beliefs, and hopes for the future of your family.
Tips for Writing and Safeguarding Your Letter of Instruction
Be Clear & Stay Organized
Write a clear, concise letter covering all the topics above. Keep it simple and straightforward, but provide enough detail to guide your executor and heirs. While a Letter of Instruction has a practical purpose, don’t hesitate to include personal touches.
Update It Regularly
Review and update your letter annually or whenever significant life changes occur, such as the purchase of new assets, change in marital status, or changes in professional advisors.
Store It Securely
Keep the letter of instruction in a secure location, such as a safe deposit box or a secure digital vault. Ensure your executor and a trusted family member know where to find it and how to access it when needed.
It’s never easy to sit down and consider the details of what will happen after you’re gone. Thinking about topics like asset distribution and funeral wishes can feel overwhelming or even uncomfortable. However, creating a Letter of Instruction can be one of the most thoughtful steps you take for your loved ones.
By organizing important information and sharing your personal wishes, you help ease the burden on those left behind, ensuring that your intentions are understood and followed. Though difficult to confront, taking the time to create and update a Letter of Instruction can offer you and your family lasting peace of mind.
