Ideally, your letter of instruction should include at least the following information:
- A complete list of your assets
- A complete list of accounts with named beneficiaries or payable-upon-death designations
- A complete list of your insurance coverages, especially life insurance coverages and associated beneficiaries
- The location of property deeds, vehicle titles, and other legal documents needed to settle your estate
- The names of any creditors such as a bank holding a mortgage or car loan
- The names and contact information of those authorized to manage your assets such as an estate planning attorney, wealth management professional, or stockbroker
Including all these items in your letter of instruction will make closing your estate and disbursing inheritances easier. However, you should remember that your letter of instruction is not a formal estate planning document. Since a letter of instruction cannot replace a will or trust, it should not:
- Name heirs
- Name beneficiaries
- Name a guardian for your children or pets
- Condition the disbursal of any funds, accounts, or assets
- Grant anyone power of attorney for any reason
What to Discuss With Your Estate Planning Attorney
Before you consider drafting a letter of instruction, you should already have begun building the foundations of an estate plan. If you do not have an estate plan, your letter of instruction will do nothing to help your family avoid probate.
Additionally, a letter of instruction is not always necessary—or even desirable. If your estate plan is likely to need adjustment in the coming years, you may not wish to draft a permanent letter of instruction, since it would have to be changed to reflect any alterations you make at a later date.
Your estate planning attorney can help construct the best estate plan for your needs. They can also advise you on the best way to structure your letter of instruction, so that it may serve as a comprehensive guide to your loved ones.
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