How an Estate Planning Letter of Intent Can Help Your Family

Estate planning is an important task that everyone should undertake to protect their family and loved one’s financial future. But estate planning can do much more than address the transfer of assets, it can also provide for care of those you leave behind. One aspect of estate planning that is often overlooked, but can be quite useful, is the letter of intent. This document is typically contained with other estate plan documents, and includes instructions on how the estate and decedent’s executors should manage the estate’s assets and care for family and loved ones.

The Benefits of Letters of Intent

Estate planning documents are written in legal terms that may not provide much practical guidance. Some terms that you will commonly see in these documents include maintenance, support, health, and education. Eventually, your estate plan, and the included wishes, will need to be put into practice. Since there can be numerous interpretations to these terms, a letter of intent can help provide clarification with additional context about what you want these terms to mean.

Likewise, it is typical for trusts to grant the trustee discretion to distribute the estate’s assets. This discretion gives him or her the freedom to decide what should be done with a beneficiary’s share. A letter of intent can provide the trustee (who is often a family member) with guidance on how to exercise his or her discretion without the legal risks associated with limiting their decisions by putting these limitations into the trust document. This can be when it comes to providing for a child, especially one with special needs.

Limitations of Letters of Intent

While letters of intent can be a useful addition to your estate plan, they present some limitations. For example, a letter of intent is not a legally-binding document.  It simply serves as a guide for the management of your estate after your death. That being said, some courts have relied on letters of intent when there is a question regarding a decedent’s wishes. Similarly, anyone who is put in charge of managing your estate will likely turn to your letter of intent for instruction as well.

A letter of intent is a useful blueprint for your other estate planning documents. Once your letter of intent is written with specific preferences regarding your estate, your other estate planning documents should reflect these intentions so that your wishes are carried out properly and consistently. A letter of intent can be written at any point, no matter where you are in life. It should be written simply but be comprehensive in content. This can include information that would not be put into your estate planning documents, such as life experiences you wish to promote with your assets.

Estate Planning Help

While letters of intent are not legally binding, these documents are useful because they can provide guidance and context for the financial legacy you left behind and how your trustees and executors should manage your estate. Your estate planning attorney should make sure you understand your estate plan inside and out, your letter of intent helps make sure that understanding passes on to the representatives and trustees you trusted to put that plan in place.

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