Insight on Estate Planning - October/November 2019: Put pen to paper How a letter of instruction can benefit family harmony

Adler Pollock & Sheehan P.C.
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Adler Pollock & Sheehan P.C.Your will is the centerpiece of your estate plan. Typically, it’s the most important document used in estate planning and is created before any other. In addition, you should have your will periodically reviewed and updated as needed. But you can still rely on other documents to complement your will. For example, if you haven’t already done so, consider writing a letter of instruction to accompany your will.

Elements of the letter

A letter of instruction is an informal document providing your loved ones and friends with vital information about personal and financial matters to be addressed after your death. Bear in mind that the letter, unlike a valid will, isn’t legally binding. But the informal nature allows you to easily revise it whenever you see fit.

What should be included in the letter? It will vary, depending on your personal circumstances, but here are some common elements:

Documents and financial assets. Start by stating the location of your will. Then list the location of other important documents, such as powers of attorney, trusts, living wills and health care directives. Also, provide information on birth certificates, Social Security benefits, marriage licenses (and, if any, divorce documents), and military paperwork.

Next, create an inventory spreadsheet of all your assets, their location, account numbers and relevant contact information. This may include, but isn’t necessarily limited to, items such as checking and savings accounts; retirement plans and IRAs; health and accident insurance plans; business insurance; life and disability income insurance; records of Social Security and VA benefits; and stocks, bonds, mutual funds and other investments.

And don’t forget about liabilities as well. Provide information on mortgages, debts and other obligations your family should be aware of.

Funeral and burial arrangements. A letter of instruction typically includes details regarding your funeral and burial arrangements. This can be helpful to grieving family members. If you prefer to be cremated rather than buried, make that clear. In addition, details can include whom you’d like to preside over the service, the setting and even music selections.

List the people you want to be notified when you pass away, and include their contact information, if available. Finally, write down your wishes for donations to specific charities to be made in your memory.

Digital information. As many of your accounts likely have been transitioned to digital formats, including bank accounts, securities and retirement plans, it’s important that you recognize this change in your letter of instruction or update a previously written letter.

Be sure to include usernames and passwords for digital accounts — especially financial accounts — as well as social media accounts, key sites and links, and the devices themselves.

Personal items. It’s not unusual for family members to quarrel over personal effects that you don’t specifically designate in your will. Your letter can spell out who will receive random personal effects, including collections, as well as other items that may have little or no monetary value, but plenty of sentimental value.

Final thoughts

A letter of instruction can offer peace of mind to your family members during a time of emotional turmoil. It can be difficult to think about writing such a letter — no one likes to contemplate his or her own death. But once you get started, you may find that most of the letter “writes itself.” Also, take comfort in knowing that you’re alleviating stress and probably avoiding family disputes later on.

Finally, try to ensure that the letter doesn’t conflict with other parts of your estate plan, particularly your will, and lead to confusion.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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