So it’s the new year and you’ve promised yourself that you’re going to get your estate plan done. But having your documents in order is only part of a good estate plan.
What you need to do along with that is to prepare a letter that will help your family settle your affairs. You need to let them know what they need to do after you have died. Usually, what’s in this letter is more of a personal statement than actual written instructions and therefore not normally included in a legal document. But what you put in this letter should be consistent with the terms of your Will and/or other planning documents. This letter also becomes valuable if you become incapacitated, as it’s another method of making sure your wishes are known.
First and foremost, if you have made your own funeral arrangements or have special requests, make sure someone knows about them. It’s almost always too late if you put them in your Will. Make sure you communicate them clearly and provide the necessary details and documents. You could even include a pre-written eulogy. If nothing else, it may give your family some comic relief.
Next, certain people and institutions must be contacted upon your death, including your attorney, executor, trustee and tax specialist. Providing names, titles, addresses and telephone numbers now will make it easier for the person who needs to contact these individuals.
As part of this letter, put in where all your estate and financial documents are located. List any special assets, such as stock options and retirement accounts, that require action by your executor within a specific time frame. Consider a fireproof safe somewhere in your house versus using a bank’s safe deposit box.
Also make sure your family knows about any trust you have established. Include the name and address of the trustee and the contents of the trust. Don’t count on the original list of assets that are typically on the Schedule A at the end of the trust. You need to keep this updated as accounts and assets change.
Speaking of lists, it’s always good to include a complete (and current) list of all your jewelry and other valuables (china, glassware, art collections, antiques, etc.), including their location. Jewelry at the bottom of a garment bag or in with the cassette tapes tends to get thrown out. You may also include the names of those to whom the articles should be given. This list is sometimes (but not usually) part of the Will itself. The more common method is to just hand write the list of items, and whom you want to get each item, on a separate sheet of paper and sign it on the bottom.
Many of these items are only intrinsically valuable but often cause the most disagreements between family members. Consider including personal thoughts and messages for your beneficiaries. For example, you can name whom you want to receive your grandmother’s jewelry or your grandfather’s watch, as well as a bit of history relating to each memento or why you’re giving it to that particular person. While this list may not be legally binding, it’s very rare that these requests will not be honored.
Since one of the purposes of this letter is to aid your family in gathering your assets, add possible sources of benefits not mentioned in your Will. Some of these sources are Social Security, veterans’ organizations, employee, pension and retirement plans, and fraternal associations. Otherwise, these benefits might be overlooked.
The bottom line is that if you don’t make your wishes known, then those who are left get to make it up for themselves. This may be in line with what you wanted, but then again, it may only be in line with what they wanted.