What Is a Letter of Intent?

It’s never easy to think ahead to the end of our life. But the more plans we have in place, the easier it is for our loved ones to handle everything after we’re gone. One tool you can use to tie your estate plan together is a letter of intent (or instruction), which lays out any final personal or financial wishes you have.

While a letter of intent isn’t meant to replace a will, it still is a useful document to have as part of your estate plan. It helps communicate specific wishes you have for after you pass. This article will teach you more about this document, including why they’re important and what you should and shouldn’t include in one.

Understanding Letters of Intent

A letter of intent is a document that allows you to spell out your final wishes for your loved ones. This can include both financial and personal instructions. However, it is not legally binding and, as such, can’t be used to replace a will or living trust. It’s also not a requirement to include this in an estate plan.

As mentioned above, you can specify a variety of instructions with this document. For example, you may specify funeral arrangements or organ donation preferences here. Or you may want to use it to detail what you want your children’s future to look like, such as special care or other info. No matter the type of wishes you have, this is a place for you to communicate them to your loved ones so they can carry them out.

Why You Should Create One

A letter of intent is a way for you to communicate to your family, friends, and heirs after you pass. If you take a moment to think about it, all of us leave unfinished business behind, whether it be children, social media, businesses, etc. Having this document allows you to communicate how you want what you’ve left behind to be taken care of.

In the context of estate planning, your letter can help eliminate any questions about how you want your assets to be distributed. Being an executor can be a tall task, especially when there’s more to take care of. A document clearly outlining your wishes can help make it easier for them.

Also, because it’s not a legally binding document, it won’t be under the scrutiny of the court. This means that only beneficiaries will be able to see it, giving you much-needed privacy to lay out more personal instructions. It also allows you to update or change it as much as you want during your life.

What to Include in a Letter of Intent

Before you write your letter, you should have an idea of what you’d like to include. Of course, you’ll be able to update it later if you wish. However, there’s some info that you should consider adding right off the bat, such as:

• Why you’re writing it. Somewhere on the document, you may want to specify “this is my letter of intent,” as well as any other reasons why you’re writing it. This way, there’ll be no questions about its purpose.
• Instructions for guardians of minors or the elderly. It’s crucial to name preferences for guardians, outline your wishes for your children (or elderly in your care), as well as break down special care instructions if applicable.
• Beneficiaries. It’s a good idea to reiterate who your beneficiaries are, even if it’s in your will.
• Asset distribution. Adding special explanations for why people are receiving which assets will help your loved ones avoid disputes and understand your decisions better.
• Miscellaneous valuables. Certain valuables and assets may need special instructions, such as your social media profiles or family heirlooms. This is where you can specify what you want to happen to them.
• Funeral or burial wishes. Most people have specific preferences for how they want to be honored after their death. This is where you can outline these details so your loved ones can accommodate your wishes.
• Testamentary wishes. A letter of intent allows you to include personal messages to your loved ones. This may be life lessons, encouraging messages, or anything else you would like to say.
• Estate plan information. Your letter also allows you to inform people about your estate plan, including where documents are and the contact info for your financial advisor or attorney.

What Not to Include

While a letter of intent is useful for specifying your wishes, there are some things you should avoid including as you write it. It’s important to remember that it isn’t a will, so information that one would include probably shouldn’t find its way into this document. For instance, you wouldn’t use it to distribute assets or name an executor.

This document also isn’t a place to include medical directives. A living will or advance healthcare directives are tools that can help you do that.

You should also avoid including anything that’ll complicate the estate settlement process or create confusion among loved ones. While it’s smart to provide the location for documents, you shouldn’t share passwords, banking information, or anything similar.

How an Estate Planner Can Help

Creating an estate plan is often a mentally taxing process. And it can be hard to know where to start. Letting a qualified planner take the reins can alleviate some of the pressure on your shoulders.

An estate planner can help you with all aspects of the planning process, including writing a will, a letter of intent, and healthcare directives. They can also serve as a point of contact for your loved ones after you pass if they have questions about your wishes.

To find an estate planner, we recommend using a matching tool to narrow your search. After completing a short quiz, it’ll connect you with up to three vetted professionals in your area.

Frequently Asked Questions

Can I use a letter of intent instead of a will?

No, a will is a legally binding document that can name an executor and beneficiaries, distribute assets, and appoint guardians for minor children. A letter of instruction is a more personal, non-legally binding document that specifies personal or financial wishes, but it isn’t a requirement.

Can a letter of instruction be handwritten?

Yes, you can handwrite the document and there are no special rules regarding this because it isn’t used for legal purposes. However, be sure that it’s legible and signed by you.

Is a letter of intent binding?

No, it isn’t a legally binding document. Your loved ones, while able to read your wishes, won’t be required to carry them out. With this in mind, you shouldn’t use it to distribute assets or name an executor, among other tasks. This is what a will can do for you.

Even though the document isn’t binding, it still holds immense value. It serves as one of your last opportunities to communicate your personal and financial wishes to your loved ones.

Does a letter need to be notarized?

Because it isn’t a legal document, it doesn’t need to be notarized. You should, however, sign it to prove its authenticity, especially if you write it by hand.