Estate planning is going to involve the facilitation of future asset transfers through the execution of a legally binding document such as a will or trust. However, if you want to have a comprehensive estate plan in place that provides a turnkey situation for your loved ones, you should also include a letter of final instruction.
There are practical tasks that must be completed after you pass away to bring your final wishes to fruition. If you use a last will to transfer assets, you name an executor to administer the estate.
The executor must pay final debts, communicate with interested parties, and prepare the assets for distribution to the heirs. To accomplish these objectives, the executor must have access to certain information.
You can leave behind all of the relevant information that the executor will need when you create a letter of final instruction. In the letter you could leave behind contact information for everyone that the executor should get in touch with after you pass away. These communications can be personal, but they can also be professional. The executor should know how to contact your estate planning attorney, your accountant, your insurance agent or agents, etc.
All paperwork that the executor will need should be itemized in the letter, and you should provide access to these documents. When we are talking about paperwork we are talking about things like estate planning documents, insurance policies, pension documents, financial accounts, and anything else that you can think of that would be relevant.
The letter of final instruction should also provide access information for financial accounts that you manage online. Many of us do a great deal of business on the Internet these days, so this is essential information.
If you have websites, blogs, and/or social media accounts, you should let the executor know how you want these accounts handled after you pass away when you create your letter of final instruction.
There is also the matter of final arrangements. If you have already made arrangements in advance, you should share this information in your letter of final instruction. Even if you have not made arrangements yourself, you can instruct the executor with regard to the way that you want to be laid to rest.
Real property, vehicles, storage units, and the like are another consideration. You should leave behind instructions and keys or combinations.
We have provided a few things to think about, but there is a common sense element involved when you are creating a letter of final instruction. You know the details of your life better than anyone else, and you should be well aware of what the executor will need to know.
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Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.