A letter of instruction supplements legal estate planning documents.
Some things are unnecessary but are helpful.
For example, TSA pre-check and Global Entry are not required to travel by air.
Those who travel by airplane infrequently may find the cost of these to be unjustifiable.
Others who fly frequently internationally and domestically for business or pleasure often find either of these supplements to be well worth the expense and almost necessary for their travel needs.
It has been said that “whether you are traveling to heaven or to hell, you must go through Atlanta.”
Having done our share of traveling to or passing through that airport – Hartfield-Jackson Atlanta International Airport – Gretchen and I can assure you that TSA pre-check is well worth the price to avoid standing in long lines wondering if you will catch your flight.
According to a recent Forbes article titled “Letter Of Instruction: Roadmap To Take This Important Estate Planning Step,” a letter of instruction works similarly in estate planning.
Some people do not benefit from including a letter of instruction while others find it necessary.
What is the purpose of these letters?
Although they carry no legal authority, letters of instruction can serve a variety of purposes.
Some people treat them as ethical wills used to pass wisdom, beliefs, thoughts, and wishes to the next generation.
Others use them as a way to organize and communicate financial and healthcare information to loved ones or executors.
Those who create letters of instruction often choose either to write separate letters for each purpose or to structure a single letter by categories.
What might be helpful categories to include in a letter of instruction?
ICE – In Case of Emergency.
This category is important for providing a snapshot of what your agents and fiduciaries will need to know to execute their roles effectively.
One of the key components to include is the location of the original estate plan and other legal documents.
ICE – In Case of Financial Emergency.
The attorney in fact under your general durable power of attorney, personal representative under your last will, and the successor trust under your revocable living trust will find it helpful to have specific details on your financial situation so they can better understand and navigate their responsibilities.
You should let these individuals know where you store and maintain important financial data.
You should also include how to access this information in your letter of instruction.
Just because you are incapacitated or dead does not mean you are free from paying bills or creditors.
By including a list of creditor information and recurring bills, you can simplify the payments of these obligations.
ICE – In Case of Health Care Emergency.
This section is especially vital in incapacity planning.
Your agents will find it helpful to know where your health records are maintained and the highlights of important medical information and challenges.
Contact information for physicians and health insurance should also be provided.
Key Family, Advisers, and Other People.
Although several key individuals like your attorney in fact, personal representative, and trustee will be identified in your estate planning documents, other professionals are not typically included.
In your letter of instruction, you should include the contact information, positions, and relationships of professional advisors and key personal relationships.
Helpful people to include are family members, attorneys in fact, personal representatives, and trustees, along with professional advisors like your CPA, estate planning attorney, financial advisor, and personal banker.
While you may find a letter of instruction to be unnecessary in your situation, those who do choose to include one in their estate planning may find these categories beneficial for organizing their thoughts.
Reference: Forbes (June 18, 2023) “Letter Of Instruction: Roadmap To Take This Important Estate Planning Step”