By Derek J. Garland, CFPbbt-perspectives-Letter-to-My-Loved-Ones 2018 issue I

With today’s complex and ever-fluctuating tax environment, proactive estate planning is as important as it has ever been. Existing within the estate plan of most individuals is a document known as a Last Will & Testament or more commonly called a “will.” A Last Will & Testament is a person’s final legal declaration describing: 1) how their property should be distributed after their death and 2) who will manage their estate until its final distribution (the Executor/Personal Representative). Wills can run the gamut in the scope of size and complexity – ranging from simple, one or two page versions up to 30+ pages in more complex scenarios.

As you can imagine, dealing with a loved one’s death is never easy. Simply locating the loved one’s will (if one exists) can be challenging and determining what assets were owned by them can be downright overwhelming. But what about the host of other important information that isn’t usually included in a will? Funeral wishes, mementos and personal effects are often left unaddressed, which can lead to feuds between family members who may have conflicting views on how to handle these items.

These are the types of issues that often keep clients up at night wondering how to best ensure their family’s well-being after they are gone. Luckily, there is a remedy for these types of concerns.

A Tailored Solution

One way to address these sensitive issues and simultaneously simplify the overall estate settlement process is a “Letter of Instruction” (sometimes called a “Letter of Intent”). Your “Letter of Instruction” is a complementary document to your will that can be used to express your personal thoughts and desires with regards to things like funeral preferences, organ donation and personal effects. It can also house helpful information for your family such as the location of your will, a list of your assets, contact information for professionals such as your financial advisor, accountant, lawyer and/or doctor, and more.

A model letter of instruction will include enough information to “fill in the gaps” for any potential areas of confusion your executor may run into while working through the estate settlement process. In addition to the issues noted, some other information you may consider providing is:

  • Plans for ongoing care for any family pets
  • Funeral arrangements that have been made in advance
  • Loans and/or debts outstanding (including credit cards)
  • Beneficiaries (and their contact information) for retirement accounts and life insurance policies

For Your Family

Another benefit of a letter of instruction is, unlike your will, it is a private document not available for public inspection during probate. This leaves you with the flexibility to address any sensitive family issues without the threat of prying public eyes. You may use this letter as an opportunity to relay your final thoughts and wishes, to pass on values that are important to you or for any other purposes. Because a “Letter of Instruction” is not a legal document, there is no specific format that must be followed. You don’t need to have an attorney draft it nor do you need to share it with anyone. You can truly feel empowered to address with your family any topic you wish.

Conclusion

A “Letter of Instruction” can be interpreted as a physical version of your “guiding hand” for those who will be left to manage your affairs once you are gone. You may think of it as one final gesture of enduring love and concern for your family’s ongoing well-being. Just like other documents in your estate plan, it should be reviewed at regular intervals and updated with new information and changes in your life. Finally, should you decide to use a Letter of Instruction, please be sure to let your family know where it will be located so it will be of use when needed.

Your trusted Wealth advisor can serve as a resource to help you incorporate this important document into your estate plan.

By Derek J. Garland, CFPbbt-perspectives-Letter-to-My-Loved-Ones 2018 issue I

With today’s complex and ever-fluctuating tax environment, proactive estate planning is as important as it has ever been. Existing within the estate plan of most individuals is a document known as a Last Will & Testament or more commonly called a “will.” A Last Will & Testament is a person’s final legal declaration describing: 1) how their property should be distributed after their death and 2) who will manage their estate until its final distribution (the Executor/Personal Representative). Wills can run the gamut in the scope of size and complexity – ranging from simple, one or two page versions up to 30+ pages in more complex scenarios.

As you can imagine, dealing with a loved one’s death is never easy. Simply locating the loved one’s will (if one exists) can be challenging and determining what assets were owned by them can be downright overwhelming. But what about the host of other important information that isn’t usually included in a will? Funeral wishes, mementos and personal effects are often left unaddressed, which can lead to feuds between family members who may have conflicting views on how to handle these items.

These are the types of issues that often keep clients up at night wondering how to best ensure their family’s well-being after they are gone. Luckily, there is a remedy for these types of concerns.

A Tailored Solution

One way to address these sensitive issues and simultaneously simplify the overall estate settlement process is a “Letter of Instruction” (sometimes called a “Letter of Intent”). Your “Letter of Instruction” is a complementary document to your will that can be used to express your personal thoughts and desires with regards to things like funeral preferences, organ donation and personal effects. It can also house helpful information for your family such as the location of your will, a list of your assets, contact information for professionals such as your financial advisor, accountant, lawyer and/or doctor, and more.

A model letter of instruction will include enough information to “fill in the gaps” for any potential areas of confusion your executor may run into while working through the estate settlement process. In addition to the issues noted, some other information you may consider providing is:

  • Plans for ongoing care for any family pets
  • Funeral arrangements that have been made in advance
  • Loans and/or debts outstanding (including credit cards)
  • Beneficiaries (and their contact information) for retirement accounts and life insurance policies
For Your Family

Another benefit of a letter of instruction is, unlike your will, it is a private document not available for public inspection during probate. This leaves you with the flexibility to address any sensitive family issues without the threat of prying public eyes. You may use this letter as an opportunity to relay your final thoughts and wishes, to pass on values that are important to you or for any other purposes. Because a “Letter of Instruction” is not a legal document, there is no specific format that must be followed. You don’t need to have an attorney draft it nor do you need to share it with anyone. You can truly feel empowered to address with your family any topic you wish.

Conclusion

A “Letter of Instruction” can be interpreted as a physical version of your “guiding hand” for those who will be left to manage your affairs once you are gone. You may think of it as one final gesture of enduring love and concern for your family’s ongoing well-being. Just like other documents in your estate plan, it should be reviewed at regular intervals and updated with new information and changes in your life. Finally, should you decide to use a Letter of Instruction, please be sure to let your family know where it will be located so it will be of use when needed.

Your trusted Wealth advisor can serve as a resource to help you incorporate this important document into your estate plan.

About the Author

Derek J. Garland, CFP

Derek J. Garland, CFP

Assistant Vice President

Derek has over six years of experience assisting affluent families and individuals with their estate and retirement planning needs. He earned a bachelor’s degree in trust and wealth management from Campbell University and is a Certified Financial Planner® (CFP).