An estate plan is made up of a number of legal documents that contain the instructions necessary to determine things such as the division of your estate assets after death or who will control those assets should you become incapacitated. While all of these legal documents are necessary to ensure that your wishes are honored, there may be additional information that you wish to leave behind that is not included in any of the plan documents. This is where a Letter of Instruction comes in handy.
A Letter of Instruction is essentially just what the name implies – a letter full of instructions for your executor and/or beneficiaries. There are no specific requirements for a Letter of Instruction. Instead, it is your opportunity to provide helpful suggestions, additional information, or even explanations for choices you made in your estate plan. Some ideas for inclusion in a Latter of Instruction include:
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Directions to the location of estate assets
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Directions for the management or care of estate assets
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Contact information for your attorney, accountant, investment banker and real estate agent
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Wishes with regard to your funeral and burial if not included elsewhere in your estate plan.
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Requests for beneficiaries with regard to the use or care of a gift
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Explanations to beneficiaries regarding gifts, or the lack thereof
Nothing contained in a Letter of Instruction is legally binding; however, the information contained in A Letter of Instruction can be extremely beneficial to your executor and may help prevent discord or conflict among beneficiaries. Absent a Letter of Instruction, your executor may waste precious time and resources just trying to find your estate assets for example. Moreover, unless you have pre-planned your funeral burial, your loved ones may be in the dark with regard to your wishes.
Along with providing valuable information to those involved in the probate of your estate, a Letter of Instructions allows you to leave behind a message for loved ones. People often use this opportunity to explain the history of a specific bequest or to explain why someone was cut out of the plan or received less than what may have been anticipated. While there is no guarantee that providing an explanation will prevent a court challenge to your estate plan, it does provides you with the ability to give people explanations, thereby limiting the odds of a challenge.
We sure to discuss the role of a Letter of Instruction in your plan with your Texas estate planning attorney.
Stephen A. Mendel, Estate Planning Attorney
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