The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.
Many of my clients have heard me tell the story of my grandfather clock. My grandmother, Pauline K. Smith (MeMe), gave me this clock. Like many families, we had Thanksgiving, Christmas and Easter with our family at MeMe's house. These traditional family get togethers are etched in my mind. One Easter, MeMe asked all in attendence to tell her something that she owned that we really liked. That day, I whispered into MeMe's ear that I really liked her grandfather clock. She then told me that that would be my clock and together we created a label, using a raised label maker, that said Sam's Clock. Once we affixed the label to the back of the clock, MeMe told me that the clock was to remain with her until she was done using it. My sister and each of my cousins also told MeMe something special to them. I suspect that had two or more of us picked the clock, MeMe would have pulled out the old Pick Up Sticks game and we would have played for it, but that wasn't necessary. What MeMe was doing was making a designated gift during her lifetime of a personal item. I encourage my clients to do the same and create family memories of their own. So, this week, that is the topic I will cover.
A comprehensive estate plan often includes writing a Last Will and Testament to transfer your assets to your beneficiaries. Once you’ve passed away, the executor of your Will shepherds the Will through the probate process. However, you may have things you’d like to communicate to your loved ones and beneficiaries that you don’t want to include in the Will itself. Often, these are informal instructions that will help your executor carry out your wishes. It might also include such informal elements as opinions about your funeral, the values you’d like to be remembered for or a list of personal items designated for individuals.
Sometimes known as a letter of intent, a list of personal items designated to certain individuals is a document that provides specific information regarding your preferences as to who gets certain personal items, family heirlooms, sports memorabilia, jewelry, guns or a clock. The letter of intent should clearly identify the individual and accurately describe the item you wish for them to have. Labeling the item(s) helps as well. The Will contains a paragraph that specifically references this letter of intent or list so that personal items do not have to be made public record, but the executor knows who gets what item.
Another similar item is a letter of instruction on anything from key contacts, account information, family information, medical care, or your funeral wishes. A letter of instruction isn’t legally binding in any way, unlike a Will. Rather, it’s meant to be something of a crib sheet for the executor of your Will or your loved ones. You can use plain English to communicate anything you want regarding your affairs as a reference once you are no longer able to communicate this information personally.
Because there is no legal aspect to this document, you are free to also include messages to your family if you wish, and you can touch on matters that you may not be able to include in something like a Will or an advance directive.
What Should You Include in Your Letter of Instruction?
What you decide to include in your letter of instruction is completely up to you. There’s no one piece of information that will qualify or disqualify your letter. Your attorney should provide you with guidance in this matter and may even have a form. That said, there are a handful of things that will make your executor’s life easier when she’s working to probate your estate. This information includes:
· A list of all your assets;
· The location of any assets that may not be readily accessible;
· All of your account information, including passwords, PIN numbers and account numbers, for any bank accounts or retirement accounts you have;
· Contact information for anyone who helps you with your finances, including attorneys, brokers, bankers and financial advisors;
· Informal directions about how you would like the executor to disperse some of your assets, typically heirlooms or other sentimental possessions;
· If you’d prefer people to make donations in lieu of flowers at your funeral, information about which charities you prefer;
· Where your executor can find your most recent tax returns, Social Security statements, birth certificate and other important documents;
· Similarly, where your executor can find any real estate titles/deeds or oil and gas leases, etc.;
· Your Social Security number;
· Any divorce and/or citizenship papers, or applications thereof;
· Contact information of any creditors (mortgage, car, etc.) and any insurance companies, particularly if you have a life insurance policy;
· If you have pets who will need a home, where you would like your executor to send them.
From there, you can include any messages or additional preferences that come to you. Some people choose to include a preference for burial or cremation. You might even mention which songs you’d like played at the funeral.
Letter of Instruction vs. Last Will
Although a letter of instruction and a Last Will discuss similar topics, they are distinct documents with several differences. First and foremost, a letter of instruction isn’t a legal document, while a Will has legal force. State law requires that your executor or administrator follow the terms of your Will, whereas no one is required to follow your letter of instruction. In order to prevent any potential conflict as to whether your letter of instruction is a testamentary document or not, you should let you estate planning attorney provide guidance.
Because of this distinction, a letter of instruction can be much more flexible. You’re essentially just writing a message to an executor or a loved one with helpful information. This is why you can choose to include anything you want.
A letter of instruction can’t take the place of a Last Will. If you pass away without a Will, a court-appointed administrator will distribute your possessions according to state and county law rather than your letter.
While it can’t serve as a substitute for a Last Will, a letter of instruction can be extremely helpful to your loved ones. You can spell your wishes out in simple terms, and you can leave them a final message without the formality that comes with a legal document.
It is very important to have an estate planning attorney help draft your estate planning documents, and provide guidance with letters of instruction. It is money well spent to avoid expensive conflicts later.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. © www.moakandmoak.com