Estate Planning / Business Planning / Improve The Odds
Some Thoughts Regarding The
Preparation of a Letter of Instruction
Copyright 1991, 1998 - Thomas J. Keating, IV, All Rights Reserved
An oft-overlooked part of the overall estate planning process is
the preparation of a letter of instructions, the purpose of which
is to give your family and/or your personal representative timely,
private and useful information and advice concerning the
administration of your estate and related matters.
Such a letter is certain to ease the task of adjusting to the
changes which your death will bring, and those who come after
you will be thankful for your thoughtfulness and foresight in
While any such letter is necessarily unique, and no "blueprint"
can be completely relied upon, this memorandum is intended to
give you some guidance as to what such a letter of instructions
might usefully contain.
You should consider, prior to beginning such a letter, who is
to receive it or otherwise have access to it, as that fact may
well influence its contents, especially, if sensitive information is
to be included. As an alternative, it might be preferable to
prepare two different letters, one to your family generally and
the other to your personal representative alone.
The length and complexity of any such letter will depend on
the circumstances; it might be as brief as two or three
handwritten pages or, in an extraordinary case, as long as
twenty or thirty typewritten. It should periodically be updated,
probably every other year at a minimum, and certainly
whenever significant changes occur.
Here is a description of some of the subjects which you might
wish to address in such a letter. They are arranged in three
sections; Section One deals with information that will be of
use and interest immediately after your death, Sections Two
and Three deal with intermediate and longer-term concerns,
Section One - Immediate Concerns
1.1 Organ Donations. If you
have made organ or tissue donations, identify the recipient
organizations and provide a telephone number so that the
necessary post-mortem medical processes can be performed
promptly and effectively.
In this connection, you should also consider notifying your
primary care physician and asking him to place evidence of
such intended donations in your medical record.
1.2 Autopsy. If you have
significant personal preferences on the subject of autopsy,
you should state them, together with the reasons therefor,
so that those preferences will be known and considered.
1.3 Funeral & Burial.
Describe your wishes regarding funeral and burial (or cremation,
as the case may be). Attach a list of the names, addresses
and telephone numbers of people and organizations who should be
notified upon your death.
Specify your place of burial, and whether your lot or crypt
and/or grave marker have been purchased and paid for. Identify
the people who you wish to serve as pallbearers or in any
other official or honorary capacity, the name of the funeral
director, type of casket and grave marker, and other relevant
If you are to be cremated, specify the manner of disposition
of your ashes. Consider specifying a particular charity or
other recipient for memorial gifts, if any are made.
1.4 Obituary. The
preparation of an obituary will be a difficult task in the
relatively short time available, and you might want to set
down a list of points to be touched upon by the writer, or
perhaps, depending on circumstances, to prepare an actual
draft of the obituary yourself.
1.5 Genealogy. You might
wish to provide a brief genealogical sketch, identifying such
of your antecedents, by date and place of birth and death,
and other facts if known, as you can conveniently do, so
that this information will be preserved.
You should also cause the memo to reflect your own correct
name, any other names by which you have ever been known,
and your own date and place of birth.
Section Two - Intermediate Term Matters
2.1 Original Documents. You
should generally identify the documents which will govern the
administration of your estate (e.g. Will, Trust Agreement, etc.),
and set forth the location of the originals of those documents.
It would also be well to identify the persons or institutions named
as personal representatives and/or as trustees, so they can be
2.2 Government Benefits. You
should identify the government benefits for which various members
of your family are or may become eligible (such as social security,
medicare, medicaid, military benefits, etc.) and, if possible,
furnish names and telephone numbers of contact persons in
appropriate government agencies.
Consider acquiring and attaching to the letter a statement of
your social security benefits, which is available from the Social
Security Administration upon request.
2.3 Advisors. Identify all
of the persons upon whom you rely for business or personal advice,
including your attorney, accountant, banker, insurance agent(s),
securities broker(s), clergyman, etc. Show their full names,
complete mailing addresses and any telephone numbers at which
they can be reached.
2.4 Insurance. Describe in
detail all of your insurance coverage (life, health, liability and
casualty) giving names of companies, policy numbers, effective
dates of policy, levels of coverage, and the name, address and
telephone number of your agent or other contact person.
2.5 Employment Benefits. If
your estate or members of your family will become recipients of
employment benefits (pension plans, profit sharing plans, deferred
compensation plans, salary continuation plans, etc.) you should
describe the amount of the benefit, the manner in which it is to
be paid, and identify a contact person, usually someone in the
employer's personnel or employee benefits department, who is
familiar with your situation and can answer specific questions
from your family and/or personal representative.
2.6 Domestic Employees. If
you have domestic employees, you might wish to make some
suggestions about their continued employment or, if that is
not appropriate, about severance arrangements and/or other
methods of easing their transition to other employment.
2.7 Unusual Dispositions.
If you have made any unusual provisions regarding the disposition
of your estate, such as unequal treatment of people who are in
an equal degree of relationship to you, you might consider
commenting on your reasons, bearing in mind, however, that
such comments can be a two-edged sword, and a disappointed
heir might try and use such comments as a basis for challenging
the validity of your Will or as a lever to secure some other
form of redress.
Extreme caution, and suitable professional advice, is indicated
2.8 Prior Marriage/Adoption.
If you have had a prior marriage which terminated other than
by death of your spouse, make reference to any continuing
obligations which you may have either to the former spouse
or children of that marriage.
If there have been any adoptions into or out of your family, you
should make reference to them and describe the present legal
status of the person(s) so adopted.
2.9 Charitable Pledges. If
you have made any charitable pledges which are to be paid
over a period of time, make reference to those pledges and
indicate how you wish any remaining balance paid subsequent
to your death.
2.10 Safe Deposit. If you
have a safe-deposit box or boxes or other secure storage
facilities, identify the location and number of each such box
or facility, who has access thereto besides yourself (and
whether as a co-renter or as a deputy) and describe the
customary location of your key.
Section Three - Longer Term Issues
3.1 Prepare Inventory. Set
down an inventory of all of your significant assets and
liabilities, both those held individually and those which are
held jointly with your spouse or others. Segregate the
individually owned items from those which are owned jointly.
In each instance, the memorandum should describe the type
of asset, its approximate value, its location, its ownership,
and any peculiar characteristics, and, with regard to
liabilities, should specify the terms thereof and any security
for repayment. With regard to amounts owed to you by others,
you should identify the debtor, the amount, what evidence
there is of the indebtedness, and any security which you hold
3.2 Bailed Assets. If you
are in possession of personal property owned by someone else,
or if someone else is in possession of personal property owned
by you, you should specify the asset with enough precision to
permit its identification, and, in the case of assets of yours
which others are holding, secure a written acknowledgement
that the item is owned by you and will be returned promptly
upon request from you or your estate.
3.3 Your Residence. Consider
describing any idiosyncrasies about your residence, and furnish
a list of persons who are knowledgeable about the furnace, the
plumbing, the electrical system, the appliances, etc.
You might also want to prepare a memorandum regarding the routine
operation of the heating and air conditioning systems, water
supply and disposal systems, appliances, and so forth.
If you have been the "fix-it" person in the family
someone is bound to thank you for this particular thoughtfulness.
3.4 Pets/Memorabilia. If you
do not have any close family members, you may wish to leave
instructions regarding the disposition of any pets you may own,
and/or family memorabilia (photographs, letters, etc.) which
do not have any intrinsic value.
3.5 Your Child(ren). If
you have a minor child, or an incapacitated adult dependent, you
might wish to make suggestions regarding the continuing care of
that child or dependent.
In this regard, consider discussing, in a memorandum directed
to the child's prospective guardian, your specific goals and
aspirations for each child, perhaps covering the areas of
education, social and cultural activities, sports and
recreation, religious training, career objectives and so forth.
As a precaution, you should also contact any person whom you
are mentioning in this connection, to determine his or her
availability and willingness to assume such responsibilities.
3.6 Fiduciary Duties. If
you are serving as a fiduciary (personal representative,
trustee, guardian, custodian, attorney-in-fact, etc.) for
any other person you should so note, and furnish the name
of the person(s) to be contacted to take over your duties.
You should also describe the location of your files and
records relating to these positions, and make sure that each
of those files contains full, complete, and orderly records of
the fiduciary estate. The prompt and successful transition to
your successor fiduciary will help relieve your estate of
3.7 Business Interests. If
you have a substantial interest in a closely held business,
whether operated as a proprietorship, partnership, limited
liability company or corporation, the successful sale or
liquidation (or continuation, as the case may be) of that
business may depend absolutely on your providing post-mortem
guidance, through a memorandum, to your successor management
and your personal representative.
Unless you have highly qualified backup management already in
place, your personal representative will have the difficult
task of attempting to manage an ongoing business without the
body of knowledge that you have accumulated, perhaps over a
working lifetime, and the loss of that knowledge is apt to
prove an insurmountable difficulty.
Accordingly, if you have such a business interest, you should
prepare a separate confidential memorandum describing the
business, its competitive position, its strengths and weaknesses,
its capital requirements and how they have been met, its
personnel (including discreet remarks about strengths and
weaknesses of specific key people), your observations as to
whether the business should be retained by your estate,
sold (and if so some likely candidates for purchase), or
liquidated, and some realistic guidance as to how much your
estate could reasonably expect to receive in the event of any
sale or liquidation.
3.8 Intellectual Property. If
you are an inventor or author, you should set down relevant
information regarding any patents, trademarks and/or copyrights
which you hold, and the name of your legal counsel familiar
with those matters.
3.9 Professional Practice. If
you have a professional practice, describe the steps which should
be taken to close it down, identifying any other practitioner
who you would like to have serve as custodian of any remaining
files or records.
Identify all professional and other organizations which should
be notified of your death, and furnish appropriate instructions
regarding the surrender of any professional licenses.
3.10 Gift Programs. If you
have been engaged in a gift program during your lifetime, you
might wish to make suggestions to your surviving spouse regarding
an ongoing gift program by such spouse.
3.11 Litigation. If you
are involved in litigation which may not have been concluded
by the time of your death, you might wish to set down your
thoughts regarding such litigation, identifying all persons
who would have any knowledge which might be useful in the
prosecution or defense of the matter.
3.12 Exotic Assets. If you
own any "exotic" assets, such as fine arts,
collectables, etc., which are to be disposed of during the
administration of your estate, you should make suggestions to
your personal representative about the manner of disposition,
suitable appraisers, likely buyers, specific peculiarities
of the marketplace in such items, and perhaps some indication
of present value.
If you are a collector, it is almost certain that you know
vastly more about the subject than your personal representative
will, and any knowledge you can impart in this fashion is apt
to be helpful.
Postscript - December, 2002
The aforegoing article was written several years ago when the
writer was in good health. Conditions are now otherwise, and
I can tell you that preparing a Letter of Instructions under the
Reaper's watchful eye adds considerably to the general stress
and strain. It remains to be seen whether my "wonderfully
concentrated mind" will be equal to the task.
Table of Contents
Law Offices of Thomas J. Keating IV
Centreville, Maryland, USA
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