A Letter of Intent is an often forgotten but very useful part of a comprehensive plan. Also called a Letter of Instruction, it is a more informal way of providing information about your preferences or a message to your loved ones. It is not legally binding, and does not take the place of a will, but it can communicate useful information and help your executor and loved ones understand your wishes.
What is a Letter of Intent or a Letter of Instruction?
A Letter of Intent is informal—you can write it how you wish and include whatever you wish. You can write it in plain language, the language does not need to be formal. From account information to passwords to a message for your loved ones, it is up to you what you include.
Here are some ideas that can make things easier for your executor:
- Passport number, Social Security number, and driver’s license number
- Instructions on where to find your tax returns, birth certificate, real estate titles, Social Security statements, divorce decrees, or any other important documents
- Instructions on what to do with pets (rehoming or turning over to a shelter)
- Medical history and blood type
- Instructions on funeral and burial/cremation preferences
- Account information for all banking, investment, credit card, loan, and retirement accounts, such as username and password, PIN, and account number
- Username and password for your email and social media accounts
- Contact information for creditors, insurance companies, financial advisors, attorneys, etc.
- Instructions for what to do with sentimental possessions
- Contact information for the beneficiaries of your will
- A full list of all assets and their estimated value
- Where to find the key to any safe deposit box you may have
- Personal messages to loved ones
The Letter of Intent can be straightforward or very personal – you can type it up or write longhand. It will likely be the last communication your loved ones and heirs will get from you, so complete it how you want.
Is it legally binding?
No, a Letter of Intent is not legally binding. However, courts frequently rely on Letters of Intent to understand the intentions of the decedent (the person who died) if an issue arises with the will. In some states, a letter of intent could be recognized as a last will and testament if there is no other will, but a letter of intent cannot supersede or override an existing will.
What is the difference between a Letter of Intent and a will?
There are a number of key differences between a Letter of Intent and a last will and testament. A few of these have already been discussed: a Letter of Intent is not legally binding, does not replace or override a will, and is more informal than a will. Another difference is that a will is read only after a person’s death. A Letter of Intent can be useful even before you die, to communicate important information if you become incapacitated.
Using a Letter of Intent as part of your estate planning is not something that is widely discussed, but it is very effective. It can consolidate and communicate pertinent information and make the process of executing a will much easier.