What is a Letter of Instruction?

What is a Letter of Instruction?

If you have an estate plan, congratulations! While most of us understand the importance of having an estate plan, only 33% of Americans have one. And while an estate plan covers the big stuff, it isn’t designed to detail issues that, while smaller, is just as important. Those smaller details can be covered by a Letter of Instruction.

What is a Letter of Instruction?

Think of a Letter of Instruction as a cheat sheet for the executor of your estate or anyone else who will help settle your affairs after your death. It can serve as an easy-to-understand explanation of your overall estate plan for your executor and detail your wishes to your family for things not covered in your will.

A will is legally binding; a Letter of Instruction carries no legal authority. It does not need to be drafted by an attorney, nor does it have to be notarized. A Letter of Instruction is not set in stone; you can change it whenever and as many times as you like. And it’s more fluid than a will. In most cases, a will doesn’t have to be updated regularly, but a Letter of Instruction may need frequent updating.


Topics to Cover in a Letter of Instruction

No rule governs what you can include in your Letter of Instruction. It can detail things as small as what song list you want to be played at your funeral. But there are some general things it’s essential to include.

Specific Wishes for Your Funeral and Burial

Do you want a funeral at all? Some people don’t. Is there a particular person you want to be excluded from the service? Do you want to be creamed, buried, to have your body donated to science? These are the kinds of details to cover in your Letter of Instruction.

Digital Access

We’re taught to protect our usernames, passwords, and passcodes with our lives. But after you’re gone, your executor needs to be able to access your financial accounts, so include all of those things in your Letter of Instruction. Consider including the same for your social media accounts and what you want to be done with them. Do you want them archived or deleted from the internet?

A Summary of Assets and Debts

This information will be included in your estate plan somewhere! It may be scattered throughout a rather complex document, so having an overview in your Letter of Instruction can be helpful. Be sure to include all retirement and investment accounts as well.

Your spouse or partner likely has access to and is aware of things like checking and savings accounts, but the same may not be true for your retirement and investment accounts. Be sure to include copies of your retirement account beneficiary designation elections.

Include the details on any outstanding loans, including mortgages, credit cards, lines of credit, personal debts, and auto loans.

Where the Goods Are

If you have more than one home or a storage unit, it can be helpful to detail where things like jewelry, artwork, collectibles, and other valuables are kept. Additionally, if you have multiple real estate holdings, include the locations and details of those as well.

Contact Information for Professional Advisors

List and include contact information for your professional advisors, including your attorney, CPA, financial planner, and insurance agent.

Location of Documents

It’s great that you’ve created an estate plan, but what if those who need it can’t find it quickly? Your Letter of Instruction should include the location of important legal documents like your living trust, will, health care directive, birth certificate, Social Security card, and real estate deeds.

Safe Deposit Box Information

A safety deposit box is a great place to keep sensitive papers, but only if those needing them know where the box is and how to access it.

Pet Care

Pets are part of our families, and we want to ensure they will be properly cared for after we’re gone. Furthermore, be sure to include who will take custody of any pets and any special details related to their care.

How to Compose a Letter of Instruction

Because you don’t need a professional to draw up a Letter of Instruction, you can find and use an online template. However, save the letter as a PDF; that way, you can edit it as needed, but anyone you share it with will have read-only access. Keep a copy in a home safe or your safe deposit box.

Dot Your T’s and Cross Your I’s

Having a Letter of Instruction is the final piece of the estate planning process. Your estate plan protects your family, and your Letter of Instruction helps make it easier for them to carry out your wishes.

If you have any questions about estate planning or any other aspect of financial planning, reach out to us. We’re here to help you Create the Life You Love.

Are You Prepared For Retirement?

Grab our checklist to discover what issues you should consider before you retire.

You have Successfully Subscribed!