The death of a loved one can leave family members stressed and in pain for a long time. But again, the family has another task to handle during their grief. This is a time when most family members experience disputes about who inherits the deceased's property. Unfortunately, this can cause extreme conflicts, resentments, and jealousies within the family.
But the good news is that you can prevent estate plan disputes by addressing inheritance matters in time and when you are still alive. You can write a letter of instruction so that your family members will have a smooth transition when you are gone. Below is everything you need to know about a letter of instruction.
What is a Letter of Instruction?
A letter of instruction, also known as a "letter of intent," is a guide to an estate plan that helps people to settle property affairs smoothly. It contains the name of the successor trustee or executor with easy-to-understand information about your wishes for the entire estate plan.
A letter of instruction is not legally binding like other estate planning documents such as a living trust, a living will, or a last will and testament. You do not need to go to court for probate since a letter of instruction does not have formal requirements or a legal format. The letter could give a clear picture of your assets and the location of other essential documents.
What to Include in Your Letter of Instruction
What you decide to include in your letter of instructions is entirely up to you. There is no formal structure or rules to include in the letter of instruction. Here are things you can include in your letter of instruction.
A List of All Your Tangible Assets
The two types of assets in this category are tangible and intangible assets. Start by listing tangible assets that are not in cash form. This includes land, buildings, equipment or machinery, inventory, vehicles, and office furniture. Include the whereabouts of every asset, indicating the exact location.
Remember also to indicate where your vital documents are. This includes a marriage certificate, divorce papers, and birth certificate since they are essential documents that your loved ones will need in the future
Information about Your Finances
Liquid assets can also be part of your letter of instruction. This includes the money in your investment accounts, bonds, stocks, credit cards, retirement accounts, insurance policies, bank accounts, bankruptcy details and business ownership. Financial information is sensitive, so you should be careful about whom you include in your letter of instruction.
List the contact details of your attorney, employer, insurance provider, financial planner, stockbroker, and other important people involved in your financial matters. List all the financial beneficiaries and their contact information if necessary. Remember, financial information is sensitive, and you should keep it well.
Distribution of Your Property
This is one of the leading causes of conflict in families after the death of a loved one. It'd be best to make things easier for your family by indicating who you want to inherit your assets and property when you are gone.
In your letter of instruction, indicate how your family, friends, or other beneficiaries will distribute your property. You can discuss with your family members or those you think should inherit your property what they'd want to possess. This is an easy way of writing your letter of instruction and indicating the beneficiaries of your property.
The Bottom Line
A letter of instruction can be helpful and minimize issues in your family. Remember, you should keep updating your letter of instruction as per the changes in your life as long as you are still alive, just like you'd keep updating your estate planning documents. Have any questions about letters of instruction or any related concerns? We can help. Contact the Law Offices of James C. Shields for legal advice and guidance.