In 1960, shortly before his execution by firing squad, the convicted murderer, James Rodgers, was asked whether he had any final requests. “Why yes,” he replied. “I’d like a bulletproof vest.”
Unlike James Rodgers, most of us can have our final requests granted. But it takes some planning, including preparing a document called a Letter of Instructions (LOI). When Baltimore-Washington Financial Advisors completes a Pre-Retirement, Retirement, or Estate Plan for a client, we recommend a LOI as an Action Item in our clients’ plans. One year later at their annual Financial Plan Review, almost invariably, we are asking our clients why they have not completed their LOI.
Why do we keep asking clients to complete a LOI? We have seen how a clear, thoughtful LOI helps heirs and loved ones through a very difficult time. By explaining your last wishes, you will minimize confusion and avoid costly delays for your heirs and loved ones.
Your LOI should include:
- Your last wishes in regard to funeral plans and other wishes not included in the will.
- Inventory of personal items, the location of these items, and who will receive them. Video or pictures are especially helpful with inventory.
- A list of the estate’s assets and debts.
- Usernames and passwords for your computer and online accounts.
- Names of companies that you have dealings with as an investor or debtor.
- The names and phone numbers of your financial planner, accountant, insurance agent, attorney, clergy, employers, trustees, and your personal representative.
- Locations where you keep statements and other important documents (deeds, wills, advance medical directives).
Other Thoughts
The LOI does not have to be a formal legal document. But it can be very powerful. It is a personal statement of your wishes, and it will guide your personal representative and your heirs, even though they are not legally bound to follow it. Most of our clients prefer an informal approach because they can easily add or modify the document without going to an attorney.
Don’t be afraid to make the LOI personal. A letter of instruction is a good place to leave personal comments, anecdotes, philosophy, or credos. If you prefer, make the LOI a handwritten document. But remember, write clearly. In a difficult time, heirs may not understand your instructions as easily as you might think.
So, please take the time to craft a LOI. You will feel much better, and your heirs, loved ones, and friends will be grateful. If you would like a sample LOI, contact us to receive a Word document that you can use as a template.