What is a Letter of Instruction?
By taking a few hours to write a letter of instruction, you can save your family a lot of headache in the event that something unexpected happens to you, or if they had to settle your estate.
To improve your understanding of what a letter of instruction is, consider the following story:
Mary is considered the household “Chief Financial Officer (CFO)” and her husband Jack follows her lead where money is concerned.
Consequently, the mortgage is linked up to Mary’s checking account, and the credit cards are mostly in Mary’s name. Most importantly, Mary is the point person with their financial planner.
What happens when Mary becomes incapable of managing their financial obligations? This can easily happen, perhaps as the result of illness, injury, or even death.
Regardless of the reason, the ball would be in Jack’s court to manage everything.
This is where a letter of instruction can help.
A letter of instruction is a list of all relevant financial information that your family members or executor need if something happened to you.
The letter of instruction should include:
- A summary of all assets and debts
- The location of valuable physical assets (e.g. jewelry, art, collectibles)
- Details about your retirement and investment accounts
- A list of people who have an important role in your finances, and how to contact them. This list can include an attorney, CPA, financial planner, etc.
- The location of important legal documents like your living trust, will, health care directive, birth certificate, social security card, real estate deeds, etc.
- Copies of your retirement account beneficiary designation elections
- Information on safe deposit boxes and how to access them
- Usernames and passwords for important accounts
- Details on outstanding loans like mortgages, credit cards, lines of credit, personal debt, and auto loans
Finally, consider talking with your Fiduciary Advisor for assistance creating this letter of instruction. They will know how to tailor it to your specific financial situation and can be a fantastic opportunity to assess your assets and review your financial plan.
Shore Financial Planning – We’ll Walk With You
As a fiduciary, Joe has taken an oath to prioritize your financial well-being above all else. We’ll treat you with the honesty and integrity you’d expect from someone with whom you are entrusting your future
Joseph Vecchio, CPA, CFP®, MBA, the founder of Shore Financial Planning, started his investment career in 1998 as a professional trader/money manager on wall street. Joe believes in passive investing that is founded on academic evidence.
Joe takes pride in protecting people from financial predators and helping them make smart financial decisions. We will provide you peace of mind through conflict-free, value-added financial, and tax advice.