Broker Check

Beyond The Estate Plan: A Final Instructions Letter

| December 06, 2018
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Finally!  That dreaded exercise of completing your estate plan (the one your financial planner has been hounding you about for years?) is done:  you’ve met with the attorney who has drafted out your wishes in writing, and you’ve executed the documents properly.  Copies have been given to the appropriate people, so you can check that big “to do” off your list, right?  

Not quite. There’s one more piece of the puzzle to complete, which may be the most important one of all.

When you make out a will or bring one up to date, this is also the most practical time to write a “final instructions letter” — an informal document that isn’t legally binding but does two big jobs:

  1. It outlines the location of all your important papers; and
  2. It contains information about your wishes: how you would like your personal affairs handled when you die or are incapacitated.

Effectively, it serves as a "cheat sheet" for anyone involved in settling your affairs and provides them with a ready point of reference. Because these letters aren't legal documents, you can also include your own personal wishes and messages to your family. These are important details that can change quickly and are usually impractical to put into a will. 

So what kind of details should go into this letter? 

At minimum, we recommend the following:

1. Location of important personal papers. Be sure to share the exact location of documents such as deeds & mortgages, vehicle registrations, insurance policies, tax documents, birth and marriage certificates, diplomas, military papers, etc. as well as how to access these documents if they are under lock & key somewhere. 

2. Location of most recently-filed tax returns. This is especially important if you prepare your own tax returns.  If you use a CPA, make sure you include their contact information in this letter.

3. Inventory of bank accounts and bank locations. List all bank accounts by name of institution, branch address, and type of account.

4. Listing of credit cards. Make a list by issuer and card number (or an easier method:  lay all your credit cards on the face of a copy machine and make a copy to include with this letter).

5. Investments, including mutual funds, stocks and bonds. Give instructions on where your investment statements are located. You should make note of the names and contact information for any of the financial advisors/planners that you have.

We also recommend you document the following:

6. Website logins and passwords. This is critical!  Either provide a list of key website logins, pins, and passwords that you use - or indicate where they can be found.  This includes any general computer logins, email account(s), file hosting services, and online banking, retirement, and investment services.  Don’t forget Facebook, LinkedIn and Twitter!    It’s awkward, but it happens all the time:  a birthday reminder on Facebook for a friend who passed away last year.  Give the person(s) you trust the ability to disable these accounts for you.

7. Who to notify at the time of death. There are specific people and institutions that need to be notified at the time of death, including your lawyer, trustee, executor, and accountant, along with pension authorities, like Social Security. Relatives and special friends will want to know as soon as possible, so providing their names, addresses, and telephone numbers will make it easier for the person responsible for making this contact.

8. Funeral arrangements made in advance. Write down instructions regarding any funeral arrangements made ahead of time, as well as any last wishes (e.g., body burial, type of casket, cremation, and music requests). 

You should write this letter to the person most likely to take over your financial affairs after you:  your spouse, adult child, or other relative or to your attorney or other executor. You may choose to go over the letter with a family member or close friend. Couples can and probably should prepare this letter together.

It may be difficult to write this letter all at once. If so, try tackling it one section at a time, allowing yourself a month or so to complete it. The object is to get as much detail down on paper as you possibly can.

Once your letter is complete, make several copies of it.  Send one to your attorney or executor, clip another to your copy of your will, and keep one copy in the place your family would look first. Be sure to update your letter periodically. This is much easier than writing the first letter!

Documenting these final instructions is never easy, but it could save an immense amount of problems for the trusted individuals who must take over your financial affairs and/or wrap them up for you.  My father had a written inventory of his assets/accounts and went over it with me at least once a year.  When he passed away 3 years ago, that list became my Bible: it saved me many hours of headache (in addition to my heartache) sorting through his affairs, for which I am eternally grateful (Love you, Dad!). 

So if you truly want to take care of your family, seriously consider completing this last “piece” of the “puzzle” of your financial life for them.  They will be incredibly grateful that you did.

If you need help assembling such a letter, or would like our checklist of what to put in a final instructions letter, please feel free to give our offices a call. 

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