Having an up-to-date will is an excellent step in establishing an estate plan. It provides legal protection, structure to loved ones and starts the process of dispersing property. A will distributes a majority of your property, but often leaves out smaller belongings - leaving loved ones to organize what is left.
This is where a letter of intent can be of significant value and help to families. Though it is not a legally binding document, a letter of intent can provide structure and emotional support to loved ones.
What Is a Letter of Intent?
A letter of intent is a personal message designed to reduce the emotional burden of sorting through a loved one's property. But it is also a keepsake and can contain final messages to loved ones.
A letter of intent is not a legal document. It is a letter to loved ones or an executor of a will. It acts as a message from the deceased and can include an array of information from providing organization and outlining last wishes, to detailing information and sending personal messages.
AARP recommends focusing a letter of intent on three categories:1
- Funeral Wishes
- Financial Details
- Personal Effects
Why Is a Letter of Intent Necessary?
A letter of intent provides support to loved ones. They won’t need to decide who to give personal effects to or where to allocate funds. It frees loved ones to mourn and provides a small piece of comfort during a challenging time.
What Should Be Included in a Letter of Intent?
Here are some specifics to include in a letter of intent.
We all know things can change in life. That’s why, first and foremost, you’ll want to make sure all information on a letter of intent is up-to-date and accurate. An inaccurate letter with improper information might not provide proper wishes.
#2: Funeral Planning
There’s plenty that goes in to planning for a funeral - location of burial, flowers, music, time of day, etc. Providing funerary information can remove many questions loved ones might have. They won’t have to wonder if something represents a loved one's wishes, as desires will be clearly stated.
#3: Beneficiary Contact Information
A will may contain beneficiaries, but people may move or not know one another. By providing contact information, beneficiaries can easily be located and contacted. Including several forms of communication is best, such as email, cell phone, landline and mailing address.
#4: Financial and Personal Information
Include instructions for accessing information and physical documents. This includes passwords for all digital platforms, from bank accounts to social media. If possible, avoid placing physical documents in an area that would be difficult to access.
#5: Pet Care
Pets are family members for many people, and respecting the wishes of the deceased is important. But taking on the responsibility of pet care is a long-term commitment. Make sure to discuss pet care with loved ones and include plans in any letter of intent, especially if there are several pets in a household. This should include where the pet will go and how to properly care for the pet.
#6: Personal Belongings
Many personal belongings are left to be distributed by the family. But if there are any specific items that one wishes to pass down to a family member, the information should be included. This can be small or large objects from kitchenware and jewelry, to paintings and furniture. Make sure to include instructions for any objects that don’t have a recipient or if anything specific should be donated to charity.
#7: Include a Personal Message
The letter of intent is not just an object for logistics, it’s a message from the deceased to their loved ones. Personal messages to friends and family members should be included. This allows the letter to act as a final message to loved ones, providing guidance and support. It is an opportunity to share life wishes, lessons and beloved moments - the options are endless.
Understanding what to include in a letter of intent can help ease the process of estate planning. And, along with a will, a letter of intent provides some clarity to loved ones and serves as a lasting keepsake for future generations.
Beacon Hill Private Wealth is an independent, fee-only, fiduciary investment advisor providing evidence-based wealth planning solutions that simplify our clients' financial lives. Founder Tom Geoghegan, CFP® CPWA® RMA® MBA is also a member of the National Association of Personal Financial Advisors (NAPFA).
The Certified Private Wealth Advisor® (CPWA) certification administered by the Investments & Wealth Institute® is the standard for competence in the field of wealth management today. The advanced credential created specifically for wealth managers working with high-net-worth clients is focused on the life cycle of wealth—accumulation, preservation, and distribution. CPWA certified professionals are able to identify and analyze the unique challenges high-net-worth individuals face and understand how to develop specific strategies to minimize taxes, monetize and protect assets, maximize growth, and transfer wealth. The CPWA designation signifies that an individual has met initial and on-going experience, ethical, education, and examination requirements for the professional designation, which is centered on private wealth management topics and strategies.
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