After taking the time to create an estate plan, you feel that you have everything in order. It gives you and your loved ones the peace of mind that, if something happens to you, your plan will guide them through the probate and estate administration process.
However, even if the person you chose to serve as your executor knows you well, he or she probably doesn’t know everything about you or know where you keep everything. You could take one more step in order to make his or her job easier when the time comes.
Use a “letter of instruction”
As the name implies, this letter provides your executor with invaluable instructions regarding your assets and other wishes that were not appropriately addressed in your estate-planning documents. This letter is not legally binding, but it does give you the opportunity to express certain desires, provide the location of assets and provide information needed in order for your executor to perform his or her duties. You can add items, such as the following, in this letter:
- The location of all your assets, including those not readily available
- Your wishes concerning your pets, if you have any
- Needed information regarding assets such as bank accounts, investment accounts, retirement accounts and more
- Needed information regarding the people you work with regarding your assets, such as accountants, attorneys and investment brokers
- Contact information and details regarding life and other insurance policies
- Your wishes regarding disbursement of any sentimental items, such as heirlooms
- Contact information for your creditors and lenders, such as credit cards and mortgage lenders
- Information regarding any charities you wish to leave a donation to
- The location of safe deposit boxes and keys, if you have any
- The location of legal documents, such as mortgage loan paperwork, birth and marriage certificates, Social Security cards and more
- Information regarding beneficiaries to your financial accounts, such as who receives proceeds from your retirement account
- Information needed to access your digital accounts, such as usernames and passwords
You may also include personal notes to loved ones, instructions that you would like charitable donations in lieu of flowers at your funeral and more. This letter is your last opportunity to provide any other information you wish to your executor. In fact, as time goes by, you may want to update this letter as you sell or buy assets, open new accounts or make any other changes that could affect your life and the letter.