Experience. Diligence. Professionalism.

Do you need a Letter of Intent in your estate plan?

On Behalf of | Nov 2, 2023 | Firm News |

Estate planning is the number one way to ensure your wishes are followed after you pass away. While most people have at least a passing familiarity with wills and trusts, another essential document often goes overlooked. A “Letter of Intent” can significantly impact the outcome of your estate plan.

What is a Letter of Intent?

A Letter of Intent (LOI), or a “Letter of Instruction,” is a non-legal document accompanying your formal estate planning paperwork, such as your will or trust. Unlike a will or trust, an LOI has no legal authority. Instead, it serves as a personal and heartfelt communication from you to your loved ones, beneficiaries or estate executors.

Why do you need an LOI?

A Letter of Intent is your opportunity to speak directly to your loved ones and provide them with insights into your values, sentiments and intentions. It adds a personal touch to what can otherwise feel like a formal and impersonal legal process. It also offers:

  • Clarity: You can help avoid confusion and disputes among your heirs by detailing specific instructions and wishes. This can be particularly important when distributing sentimental or unique assets since explaining your thoughts behind your actions can help diffuse disagreements.
  • Guidance: An LOI provides invaluable guidance to your executor or trustee, helping them better understand your goals and intentions. This can simplify the administration of your estate and help your executor or trustee understand how to use their discretion.
  • Flexibility: Unlike a legally binding document, an LOI can be updated and revised without formal legal procedures. As long as you don’t need to update your will, this allows you to make adjustments easily.

Your LOI is also a final chance to offer emotional guidance to your loved ones. For example, you can express your hopes that your family will continue with charitable donations or pursue certain goals with the wealth you leave behind.

What are the key elements of a Letter of Intent?

Aside from detailing specific bequests so that your heirs don’t end up fighting over your cufflinks or engagement ring, your Letter of Intent can include things like:

  • Funeral and memorial instructions: This can include details about burial or cremation, preferred locations for internment, and any specific rituals or readings you want to be part of your funeral services.
  • Care for dependents and pets: If you have dependents with special needs, minor children or pets, you can use a LOI to provide guidance on their care, including the choice of guardians or caregivers and any specific instructions regarding their well-being. You can also specify your reasons for appointing those caregivers, which can have considerable weight if the issue ever goes to court.
  • Digital assets and passwords: So much of modern life is intertwined with the digital world, and it can be problematic for heirs and executors to figure out how to access your online accounts. Your LOI can hold all the information they need about your digital assets and passwords to everything from your social media and email to your online banking.
  • Contact information for important people: Your LOI can also be used to keep an updated contact list for people who should be notified upon your death. This could include everybody from the professional who prepared your will and your executor to your old friends and distant relatives.

Estate planning is a lot more complicated than most people realize, which is why it’s so important to have experienced guidance throughout the process. For additional support when drafting a Letter of Intent, working with a knowledgeable attorney can provide numerous benefits.