While it is important to have an updated estate plan, there is a great deal of information that your heirs should know that does not necessarily fit into a will, trust, or other documents.
Posted on February 5, 2024
The solution is a letter of instruction, which can provide your heirs with guidance if you die or become incapacitated.
What Are Letters of Instruction?
A letter of instruction is a planning document or a series of documents, that gives your loved ones instructions on handling certain matters related to your passing or incapacity. These items are often not addressed in a will or other estate planning documents.
However, letters of instruction can refer to provisions of your will and provide greater detail about your decisions and where to find critical information.
While letters of instruction are not legally binding, they can provide direction quickly and easily to your family. This may include the following:
How to handle your funeral arrangements
Who to notify of your passing
Where your original documents may be stored
How you would like specific personal property to be disposed of
Other information about you that may be needed to administer your affairs
These instructions may also be helpful in the event you become incapacitated and can't communicate health care preferences in emergencies or at the end of your life.
In addition, unlike a will, which requires a formal process, you can update your letters of instruction over time or as your circumstances change without notarizing or witnessing each update. Just be sure to make it clear that your copy is the most recent or only copy with a date and signature.
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Personal Property Memorandum
You can prepare several different types of instructive documents in advance. One such document is a personal property memorandum.
A common will provision states tangible personal property will be given to or split amongst various heirs. Often, your executor or personal representative may be at a loss about specific items. Knowing what you would have wanted can make a big difference.
Much of our personal property has sentimental value as opposed to market value. However, your representative may not know the details of those items that are particularly special to you and your family. You can use a personal property memorandum to describe specific tangible property and who should receive it or sell it to divide the value equally.
So, for example, if you have a collection of holiday decorations you know your daughter loves but perhaps your son has no interest in, you can describe these items and request they be given to your daughter.
There are also online services available to help you outline how to divide your personal property equitably among your loved ones. Services like FairSplit.com offer resources and video tips on this front, as well as a sample letter of instruction.
Remembrance and Services Memorandum
Another instructive document is a Remembrance and Services memorandum.This document can guide your representative, family, and friends on how you wish your remains to be handled, what type of funeral arrangements you would like or may have pre-arranged, and any desires for your remembrance.
This set of instructions is a good way for you to:
List which people, publications, or organizations you would like to be notified of your passing
Provide personal details about you that may be listed in an obituary or other publication; this may include the names of your children and spouse, your educational background, religious affiliations, civic affiliations, honors, awards, or recognitions you may have received
Direct whether you wish to be cremated or buried
Specify if you wish for a specific funeral home to handle your remains
Inform loved ones of pre-purchased arrangements
Instruct where and how your remains should be kept
Give directions on what you would like written on your tombstone or urn
Where you would like any funeral or memorial service to be held, and the specific details of that service
How costs and expenses should be handled – for example, from an account you have set up
Stay updated on how to protect everything you’ve worked for so hard during your life.
Summary of Documents and Information
Another option is the creation of a portfolio, which summarizes all the documents you have created by name and category. This may be useful when you need others to help you manage your affairs.
You can also use it as a way to provide any information your personal representative (executor), power of attorney agents, or trustee may need to make decisions for you per your wishes. It can be a big help when these people are grieving, distraught, or unable to think clearly.
As part of this portfolio, you may wish to include a letter advising them on how to handle certain matters. Although not legally binding, it can help bridge the gap and answer questions about your intentions.
You can also use this as an opportunity to tell loved ones where originals or important documents are stored, how to access them (website addresses, logins, and passwords), who has copies, whether you have a power of attorney, if you have created documents regarding your health care wishes (advance directives), and much more. In an age where people have less of a paper trail and more of an electronic existence, this can be invaluable to help your loved ones get through difficult times seamlessly.
Why You Should Consider Letters of Instruction
So, why consider letters of instruction of any kind? The best reason is that upon a person’s death or incapacity, many decisions need to be made in a short period of time. These decisions almost always have to be made before any court proceedings take place
Having instructions in place can also save your estate and your family a great deal of money. As a result, creating documents that help your loved ones navigate incapacity and estate administration processes from the very start is practical.