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Part of the Financial Planning Process is a Letter of Instruction

Mark Zaifman   |    Tue, Mar 13, 2012 @ 05:25 PM

letter of instruction is part of the financial planning process

You know the importance of having a will and power of attorney, but have you considered the peace of mind a letter of instruction would provide to your family once you are deceased?  Along with developing a financial plan, preparing a letter of instruction is a responsible step to take in your family's comfort and security. 

Simply, a letter of instruction is an informal document that provides your loved ones basic instructions and information regarding your assets and debts.  We spend a lifetime caring for and loving our family, and taking this last planning step in preparing a letter of instruction will help make the transition smooth and less stressful for them. I want to be clear - a letter of instruction does not take the place of a will, but is used along with that and the other important documents such as a durable power of attorney, etc.

You don't want your loved ones to be trying to find any of this important information in their time of grief. You'll want to spell out very specifically where they can locate the following:

  • A list or address book with contact info for friends and relatives to be notified of your death.  If you keep all this infomation on your computer, either provide login information in advance - or better yet, print a hard copy once a year and distribute.
  • A list of where all your bank accounts are located, along with account the numbers.  
  • A list indicating where they can locate original documents such as Deeds of Trust, Wills, etc.
  • Do you have a safe deposit box? Provide name and address of bank along with box # and location of your key.
  • Your father's full name and your mother's maiden name for the death certificate.
  • All information regarding insurance - medical, homeowner, etc.
  • Does anyone owe you money? You should provide a list of who and how much owed to you.
  • Notation of where your most recent income tax return is located.
  • Do you own any business interests? Where and who with? Be sure to have this info noted.
  • All information with details about retirement plans, pensions or life insurance.
  • Credit card information including account numbers and balances.
  • Even if you already have a fully executed Advance Health Care Directive, you may still want to prepare detailed burial instructions.  

You may want to prepare this as a list which is updated as needed and kept in a special binder or notebook. Jonathon Pond has a free downloadable Letter of Instruction on his website which will give you more ideas and details. Talk to your loved ones and decide together where you will keep it. You don't want to hide it so well that no one can find it later.

You don't need an attorney, or even to have your letter of instruction notarized - you just need to prepare it with as much detail as possible, in order to spare your loved ones the trauma and confusion upon your passing.

Photo credit Slamprecht