You may have great estate planning documents. You may have discussed them with your family. You may have even inventoried your digital assets and feel that your job is done. But your estate plan may still be missing one BIG thing: a "letter of instruction."
Do your representatives know what to do?
Managing an estate is a tough job. If you died today, would your Successor Trustee or other representatives even know where to start? Where is the key to your safe-deposit box? Where are your car titles? What is the combination to the floor safe? Where is the abstract of title to your home? What are the passwords to your computer and other online accounts?
A letter of instruction is meant to help guide your representatives through administering your estate after your death. Imagine that you could stand over the shoulders of your spouse or children or other loved ones and tell them exactly what needs to be done. Very likely, these individuals are going through a tremendous amount of stress and grieving. But you can ease their burden by leaving step-by-step instructions to help them through the process. That is the purpose of a letter of instruction.
What should my letter contain?
There is no right or wrong way to prepare a letter of instruction. A few ideas were mentioned above. Include a list of where your assets are located, how to access your accounts, where you keep important title documents, etc. These pieces of information are essential to managing any estate.
However, your letter can provide even greater detail. What subscriptions (cable, newspaper, lawn service) need to be canceled? What are the names and phone numbers of your advisers (financial, medical, spiritual, insurance) that should be contacted after your death? How can your representatives contact your family to let them know of your death? Where would you like your funeral held? Do you have a preferred program for your funeral? Do you already have an obituary prepared?
Your letter can also include instructions for distributing small items of personal property that have low market value — but high sentimental value — to your family. You may wish to distribute these items to certain beneficiaries rather than having them sold with your other property as part of an estate sale. Letting your representatives know about your wishes could keep these items from being lost forever. Remember, however, that your letter of instruction can only voice a preference for how you want untitled personal property distributed. All gifts of titled property must be made through proper legal documents.
What else do my representatives need to know?
In short, a LOT of stuff. While a letter of instruction is an excellent tool to convey information, you should also think about other ways you can help your representatives or loved ones through the process of administering your estate.
For example, many people do not think about the financial burden of funeral arrangements and burial costs. According to financial advisors at Bankrate.com, “Forty years ago, the cost of burial was less than $3,000. In 2019, the average cost for a funeral is between $7,000 and $9,000, which includes transporting remains to a funeral home, embalming, a casket, viewing and burial, and other basic service fees. Unfortunately, this cost does not include the cemetery plot, marker, or floral arrangements to place on a grave.”
If you have not prepaid for these services (and be careful about “prepaid” agreements—see what items your loved ones will need to pay after your death), your loved ones could be out of pocket many thousands of dollars until your estate can be probated or otherwise administered so as to reimburse them. Be sure to provide methods of accessing cash, or setting up other mechanisms, to assist your representatives with the financial burden of managing your estate.
Talk to an attorney about a letter of instruction.
Estate planning involves more than just legal papers. It takes a great deal of thought and iteration. It is also about more than just your own well-being; it is about providing for your loved ones after you are gone. And one of the best ways to do that is by creating and maintaining a detailed estate planning letter of instruction.
To discuss other aspects of your estate plan and how you can take care of your loved ones after your death, contact the Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation appointment.
David M. Postic is an associate attorney at Postic & Bates, P.C. His practice includes estate planning, probate, real estate, adoption, business law, and litigation.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our posts, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]