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An estate plan typically includes formal documents, such as a will, trust, and powers of attorney. While these tools outline legal and financial directives, they may not convey the personal nuances of your wishes. A letter of intent (LOI) bridges this gap, offering an opportunity to share additional instructions, values and preferences that may not fit within the constraints of formal legal documents.
Although not legally binding, a letter of intent is invaluable for your heirs and the individuals responsible for your estate plan. It ensures that your legacy extends beyond the distribution of assets to reflect your priorities and values.
A letter of intent is a written document that supplements your estate plan by providing specific guidance to your family, executors, or trustees. Unlike a will, which focuses on legal directives, an LOI offers flexibility to communicate personal instructions and wishes.
The content of a letter of intent varies but often includes:
A letter of intent addresses these details, reducing ambiguity, preventing misunderstandings and reassuring your family during a challenging time.
Legal documents, like wills and trusts, ensure that your assets are distributed according to your wishes. However, they may leave unanswered questions about the reasoning behind your decisions. For example, an heir may feel hurt if they receive a smaller inheritance than expected. An LOI allows you to explain your reasoning, preserving family harmony and minimizing the likelihood of disputes.
An LOI can also serve as a roadmap for non-legal aspects of your estate. For instance, it can outline how you wish family traditions to continue, provide recipes or stories tied to heirlooms, or specify the disposition of items with sentimental value not mentioned in the will.
While there is no strict format for an LOI, certain elements should be included to ensure its usefulness:
An LOI can also include practical details, such as contact information for your attorney, financial advisor, or executor, ensuring that all parties are informed and aligned.
While the LOI does not need to follow legal formalities, clarity is key. Use simple language to convey your wishes and avoid ambiguous terms that may lead to confusion.
Your LOI should complement, not contradict, your will or trust. Any conflicts between the LOI and legally binding documents can create confusion for your executor or heirs.
Life events, such as marriage, divorce, the birth of a child, or the acquisition of new assets, may require updates to your LOI. Regularly revisiting the document ensures that it remains relevant and reflects your current wishes.
Ensure that your LOI is accessible to the executor, trustee, or family members who will need it. Store it alongside your estate plan and inform trusted individuals of its location.
While an LOI provides invaluable guidance, it is not a legally enforceable document. A letter of intent aims to clarify and supplement your estate plan, not replace formal legal instruments. Working with an estate planning lawyer ensures that the legal framework of your plan is sound, while the LOI adds a personal touch to your directives.
Adding a letter of intent to your estate plan ensures your personal wishes and values are clearly communicated, providing comfort and clarity to your loved ones. At The Werner Law Firm, our experienced Los Angeles probate attorneys are ready to help you create a comprehensive estate plan that reflects your unique needs and preferences. Let us assist you in securing your legacy for generations to come.
If you have any questions, schedule a free appointment with us through our online appointment page.
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Reference: Investopedia (Feb. 20, 2021) “What Is a Letter of Instruction?”
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