estate plannngFinancial Planning

Sample letter of instruction

An earlier version of this post was originally published in 2011 when I was recovering from a long term disability that left residual cognitive and memory issues. My original intent was to help myself, my family, and others be better organized for disability or death. It is republished now updated with the use of new technology tools, especially coordination of information under LastPass.


Four key documents that every person should have are:

  1. letter of instruction,
  2. will,
  3. living will, and
  4. durable power of attorney that includes a health care directive.

The first document, the Letter of Instruction, is not a legal document but rather a financial planning tool that helps make the process of settling an estate easier. A Letter of Instruction contains the practical details that are necessary for survivors to carry out the administration of an estate settlement.

I’ve noticed that some people have difficulty imagining what should be included in a letter of instruction without seeing a sample. That is the sole purpose of this article. Of course, each individual’s letter will be completely different and there is no implied intent that the provisions of this sample will be useful in another person’s letter of instruction.

This very basic sample letter is prepared to help get started in this important part of financial planning. There is no specific required format for the letter, so adapt it to your own needs. I tend to prefer a short note without emotional reflections. Many of the sample letters of instruction currently available in financial planning publications today are out-of-date in terms of the fact that they do not reflect the extent of reliance on online banking and other financial transactions in an increasingly paperless world. A modern Letter of Instruction should thoroughly cover the technical guidance that will be necessary to access electronic information.


This information was compiled by (name) on (date) and I plan to update it as situations change.

The intended readers are 1) ____,2) ____ and 3) ____. This is intended to be used in the event of my incapacity or death.

The most recent copy of this Letter of Instruction is a file named ______________ located in the LastPass Account that will provide the information you need to begin to manage our assets or distribute them upon my death. The primary purpose of the printed copy is to call attention to the existence of the document. Do not rely solely on this printed copy of this document that might be out of date.

Electronic Data

All important information is stored electronically on my online LastPass account. This information is available from any device or location. The key piece of information you need to access all information is my LastPass account name and password that is written only on a document inside the safes.

No important documents are stored on local devices or paper except in the home safes. The easiest way to log on to this account may be to use my notebook computer. This will require use of the fingerprint or password (password). The logon password for my __________ account is (password) but might updated with the new password stored in Lastpass.

Backup files are stored in multiple systems: ___________________________. The backup passwords for the data files is (password) on both backup systems. Anyone with average familiarity with PCs and MS Windows software should be able to access this data with the PC passwords.

Accounts

All of my financial accounts and programs are managed online except ____________. The Web sites, account information, usernames and passwords password for all accounts are located in Lastpass.

Contacts

The contact information for important people including my attorney are included in “Contacts” in Outlook, synced with my mobile devices. Scan through the list and see the details section.

Legal Documents

Printed and executed copies of my will, living will, durable power of attorney and other important documents are located in the home safe (details below). The will creates trusts that transfer most of the valuable assets that we own to our children (to be removed after children are grown).  ____ would have control of all assets and then at her death assets would be distributed evenly to our children.

____ has durable power of attorney and authority to make health care choices.

My estate assets consist primarily of interests in ________________ and a ____________ life insurance policy located in the home safe. I have bank accounts at ________ and ____________. I have a health savings account at ___________________.

There may also be an open legal claim for ________ that maybe a significant estate asset.

I have small UTMA accounts for _______ and __________ at ___________ and _________________.

Some of my _________________ contracts may include beneficiary clauses that allow unearned income to continue to be paid to _____. Most of these are automated banking transactions; some income will continue to be deposited into my bank account as long as it is open but alternate arrangements must be made by the beneficiary after the account is closed.

My only specific request that is not contained in the will is that in the event I die while still paying child support, that a priority be given to ensure that cash funds are provided in at least the amount of my current child support to my children to ensure that their lifestyle is not adversely affected because of my early death. The reason for not including this request in the will is to give  the executor flexibility in handling my estate.

I suggest but do not require that ______ allow __________ to assist with financial matters involving ____________. This would help coordinate available parental support with any family support or trust funds for college expenses.

Business Interests

In the event of my death, _____________should immediately contact  _______________.

An arrangement to sell specific business assets may be included in the legal documents in the safe. If so, contact the intended buyer immediately.

Home Safe

The home safe is located in the ____________________. The key is in __________. A spare key is in ________________. It is intended to be fireproof and flood proof.

Business Safe

The business safe is located in the ____________________. The key is in __________. A spare key is in ________________. It is intended to be fireproof and flood proof.

Next Step

If you are reading this because I am deceased then be sure to request from the _________ county office a sufficient number of certified death certificates. You will need to send a certified death certificates to each account, to change asset registrations for all other assets that we own, and for insurance payments, other accounts, etc.


Since the original date of publication, emphasis of some other letters of instruction have been amended to incorporate provisions for cloud computing data systems and various self-executing software programs that are triggered by a notification of death of the owner.

Other resources

Sample durable power of attorney

Sample health care durable power of attorney

Financial Planning for Special Needs Children

Leave a Reply

Your email address will not be published. Required fields are marked *