Your estate plan should be uniquely designed to achieve your specific goals and objectives using a variety of estate planning tools and strategies. All of these estate planning documents are essential components used to protect you, your assets, and your loved ones. You may still feel though that something is missing. A Letter of Instruction may be that missing component. An Overland Park estate planning attorney at Parman & Easterday explains how a Letter of Instruction might fit into your estate plan.
Common Estate Plan Components
For most people, a Last Will and Testament or a Trust serves as the foundation of their comprehensive estate plan. A Will allows you to appoint an Executor for your estate, gift assets, and nominate a Guardian for minor children. It cannot, however, explain why you did not gift your estate equally to your children nor why you appointed a sibling, instead of a spouse, as the Executor. You can include a trust, which allows you to achieve a variety of goals, and into which you will transfer assets. A trust agreement, however, is not the best place to leave detailed instructions about upkeep of those assets or why you decided to pass down those assets in staggered disbursements. A health care power of attorney and an advance directive can grant an Agent the ability to make healthcare decisions for you if you cannot make them yourself and lets you make certain healthcare decisions ahead of time. It cannot, however, explain why you made those decisions. To explain the decisions you made, or to provide further instructions, you may wish to create a Letter of Instruction.
What Is a Letter of Instruction?
A Letter of Instruction is a document that can be included in your estate plan to provide explanations and instructions not found elsewhere. The explanations and instructions you include in your Letter of Instructions may or may not be legally binding on anyone; however, the information you include can be crucial to your overall plan. Some common uses for a Letter of Instruction include:
- Providing the location of important estate planning documents, such as your Will, life insurance policies, or a trust agreement.
- Providing a summary of all assets you own along with account numbers and/or online login instructions to access the accounts.
- Listing the names and contact information for people that need to be contacted after your death.
- Leaving instructions for maintaining assets. This could be as simple as how to winterize your vacation cottage or how to value your rare coin collection.
- Explaining controversial decisions you made within your estate plan. For example, if you gave a large donation to charity or disinherited a child, this is your opportunity to explain why you did what you did.
- Expressing your wishes with regard to your funeral and burial. Ideally, you included a funeral component in your estate plan; however, you may wish to add details to ensure that your wishes are honored.
- Distributing certain tangible personal property to named beneficiaries.
Do I Need a Letter of Instruction?
Ultimately, the decision to include a Letter of Instruction in your estate plan is one you should make only after consulting with your estate planning attorney. Despite the fact that a Letter of Instruction may not be a legally binding document, the information you include in yours can go a long way toward assisting with the probate or administration of your estate. Anything you can do to make your Executor’s job easier will ultimately benefit your loved ones. Moreover, including a Letter of Instruction in your estate plan can also help prevent litigation. If any of the terms of your estate plan are likely to cause conflict or animosity, explaining why you included those terms can deter litigation, or assist your Executor in defending your wishes if litigation cannot be avoided.
Contact an Overland Park Estate Planning Attorney
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about incorporating a Letter of Instruction in your estate plan, contact an experienced Overland Park estate planning attorney at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.
Unlike your Will, a Letter of Instruction is not required to be filed with the probate court. Therefore, you decide who is allowed to know the contents.
No. It is best, however, to work with an attorney when you create a Letter of Instruction to ensure that nothing you include in the document inadvertently causes a conflict with your other estate planning documents.
An original copy should be kept with your other estate planning documents and your estate planning attorney should retain a copy. You can also give a copy to your Executor or anyone else you think should have one.