The Importance of Having a Letter of Instructions for Survivors

As you diligently plan for your financial future, it’s crucial to consider not only what happens during your lifetime but also the steps that need to be taken after you’re gone. One often-overlooked aspect of comprehensive estate planning is creating a letter of instructions for your survivors. This document can provide invaluable guidance to your loved ones during an already difficult time, ensuring that your final wishes are carried out smoothly and efficiently. 

What is a Letter of Instructions? 

A letter of instructions is a non-legal document that complements your estate plan by providing your survivors with important information and guidance. Unlike a will or trust, which are legally binding documents, a letter of instructions is more informal and flexible, allowing you to communicate your wishes in your own words. 

Key Components of a Letter of Instructions 

A well-crafted letter of instructions should include the following key components: 

• Contact Information: Provide a list of important contacts, including your attorney, accountant, financial advisor, insurance agent, and any other professionals involved in your financial affairs. 

• Asset and Liability Information: Create a comprehensive list of your assets (bank accounts, investment accounts, real estate, etc.) and liabilities (mortgages, loans, credit card balances, etc.). Include account numbers, contact information for institutions, and login credentials if applicable. 

• Insurance Policies: Provide details on all your insurance policies, including life, health, disability, and long-term care insurance. Include policy numbers, contact information for insurers, and any relevant beneficiary information. 

• Funeral and Burial Arrangements: Outline your preferences for funeral and burial arrangements, including whether you have pre-paid for these services. Provide contact information for your preferred funeral home or cemetery. 

• Digital Assets: Include a list of your online accounts, usernames, and passwords, as well as any instructions for managing or closing these accounts. Consider using a password manager to securely store this information. 

• Personal Wishes: Express any personal wishes or messages you want to convey to your loved ones, such as charitable donations, personal property distribution, or messages of love and gratitude. 

Benefits of Having a Letter of Instructions 

Creating a letter of instructions offers several benefits for both you and your survivors: 

• Reduces Stress and Confusion: By providing clear instructions and information, you can help alleviate the burden and uncertainty your survivors may face during an already emotional time. 

• Ensures Your Wishes are Followed: A letter of instructions allows you to communicate your wishes in your own words, giving you more control over how your affairs are handled after you’re gone. 

• Facilitates a Smoother Transition: With all the necessary information in one place, your survivors can more easily access and manage your financial affairs, making the transition smoother and more efficient. 

• Complements Your Estate Plan: A letter of instructions works in conjunction with your will, trust, and other estate planning documents to provide a comprehensive plan for your survivors. 

Updating and Sharing Your Letter of Instructions 

It’s important to review and update your letter of instructions regularly, at least annually or whenever there are significant changes in your life, such as a marriage, divorce, or the birth of a child. Keep the document in a secure location, such as a fireproof safe or a safety deposit box, and make sure your survivors know where to find it. 

Creating a letter of instructions is a thoughtful and practical step in the estate planning process. By taking the time to organize your information and communicate your wishes, you can provide your survivors with the guidance and support they need during a difficult time.  

As with any important financial decision, it’s best to consult with a qualified estate planning attorney or financial advisor to ensure that your letter of instructions aligns with your overall estate plan. 

Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Jonathan Meaney and not necessarily those of Raymond James.