A letter of instruction is an informal document in your estate planning toolkit. It can go a long way toward providing additional clarity for your beneficiaries and the executor of your will.
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What Is a Will?
A last will and testament is a legal document that states your preferences for:
- Who you want to administer your estate (your executor or personal representative)
- Who you want as guardians for your minor children
- How you want your property distributed after you die
A will is one of the most important documents you will produce when planning your estate. Without a will, disputes among family members often arise, and if the probate court can’t find your heirs, your property goes to the state.
When you die, your will goes to probate court and becomes a public record. You may have wishes for your beneficiaries but don’t want those wishes in public view. A better option is to draft a letter of instruction. A letter of instruction aids the probate process but is not filed with the will.
What Is a Letter of Instruction?
A letter of instruction is not a legal document. A letter of instruction provides your loved ones with information to help make your estate administration go more smoothly. For instance, the executor of your will needs to know where to find certain documents or how to log into online accounts.
A letter of instruction should cover three main areas:
- Funeral Wishes. Provide information if you reserved and/or paid for a plot, if you request cremation, where you would like your ashes spread, and whether you would like to donate your body, organs, or tissues.
- Financial Details. Provide financial information on your financial accounts and assets, monetary and otherwise, any outstanding debts, and contact information of employers, accountants, or financial advisors.
- Personal Effects. List details of where to locate important papers, heirlooms, or certain items of value; how to care for pets; leave personal messages to your loved ones.
What to Include in a Letter of Instructions
Specific information to include in your letter of instructions:
- The exact location of the will and other estate planning documents, such as a living trust.
- Your instructions for the burial/cremation. If you are a veteran, indicate if you want burial in national cemeteries or with military honors.
- A list of friends, relatives, and others to contact upon your death.
- The location of all important documents, such as real estate deeds, divorce papers, marriage certificates, birth certificates, citizenship papers, social security cards, safe deposit boxes, and other legal documents and records.
- Any information related to membership in societies, lodges, or other organizations (Freemasons, for example). Many of them offer death benefits for named beneficiaries.
- Life insurance policies, name of insurance companies, policy number(s), insurance agent, etc.
- All bank account and savings account information, including the names of banks and account numbers, and financial advisor contact information.
- A listing of any U.S. Savings Bonds (include names, denominations, and serial numbers).
- A listing of any stocks or bonds and investment accounts
- Any pension plan or social security information.
- Income tax returns, both state and federal, from the past few years.
- Outstanding or recurring bills, plus a list of personal debts, including credit card information.
- Where to find bills and records of payment.
- Any large gifts that you have given in the past few years.
- Depending on state requirements, a signed list of personal property distribution.
- List all online accounts, including social media accounts, and passwords for each.
- Name and contact information of your estate planning attorney.
- Any wishes for your loved ones.
Your letter of instruction is not an enforceable document therefore you should include any specific wishes of who gets your property or who is guardian of your children in your will, not letter of instruction.
Advantages of a Letter of Instruction
A letter of instruction helps your executor and beneficiaries with the probate process. But this letter is also a way to communicate any thoughts or wishes for loved ones. Remember, your will becomes a public document when admitted to a probate court. You may not want these wishes as part of a public record.
For example, you may have thoughts on how your beneficiary uses their gift. Suppose you want to leave money for your niece, and you want your niece to complete college. But what if your niece has a different path to success, such as attending culinary school and opening a restaurant? You want to avoid making a conditional gift in your will because that causes problems. In your letter of instruction, you can express your hopes for your niece to attend college. However, you can allow her to use the money for something other than college.
Or you can express why you made certain decisions. Suppose you want to leave your son more of your estate than your daughter because your daughter is a doctor, and your son is a part-time teacher and has a child with special needs. You can explain your decision in detail, which you otherwise would not want to in a will.
How Make a Will and a Letter of Instruction
A will is a written document that you sign in front of witnesses. Each state has their own laws on how to make a valid will, for example if a will can be handwritten or not. You can make a will from the comfort of your home using state-specific online estate planning service forms. Or you can consult an estate planning attorney to draft a will.
Since a letter of instruction is an informal document, it can be handwritten or typed. There are no formal requirements when making a letter of instruction.
