Once you’ve created your estate plan, it’s helpful to do something called a “letter of instruction” to provide your heirs with guidance they can use if you should die or become incapacitated. Do they know where all your bank accounts are? Will they know what life insurance you have and where to find the policies?
That’s where a letter of instruction comes into play. It’s an informal document they can read that tells them about your financial and personal matters that will need their attention. It’s not legally binding and can be written in any format.
Here are some of the items you could put in the letter:
- Information about yourself that will make paperwork easier for your loved ones (full name, address, birth date, place of birth, father’s name, mother’s maiden name, and Social Security number)
- The names and addresses of people and institutions that need to be notified. This could include contact information for people you’d like invited to your funeral.
- Where all of your important papers are located (e.g., will, birth certificate, real estate deed, Social Security card, marriage certificate)
- A list of your assets, including your bank accounts, investment accounts, and insurance policies with account/policy numbers and contact information
- A list of your debts, including credit card accounts, mortgages, and car loans
- Contact information for executor, lawyers, financial planners, brokers, tax preparers, and insurance agents
- Where bills and records of payment, including recurring payments, are located
- Where your state and federal income tax returns from the past few years are located
- Which special, personal possessions you want to give to each person. Be specific about the item and the person you’re leaving it to. For example, don’t just say “Hummel figurine” if you have several figurines. Say “young girl sitting on fence Hummel figurine.”
- If you have a safe deposit box, where it is, where the key is, and what’s in the box
- Passwords for your online accounts
- Your wishes for your funeral and burial, including any advance arrangements you’ve done and any payments you’ve made.
- Your wishes for caring for your pet
As your life changes, keep this letter updated with current information. It would be wise to review this letter on an annual basis, so that you can make updates as needed. And don’t forget to tell your loved ones where this letter of instruction is located so they can easily access it when the time comes.