By Team Tomorrow
Published September 24, 2019
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.
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:
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.
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.
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.
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