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Two Documents that Can Help Convey Your Final Wishes

Dreamstime_broken promisesSeveral years ago, a man passed away and left everything to the stepmother of his children. The children were not nearly as concerned about the wife receiving financial assets as they were with her decision to have an estate sale to liquidate the home and furnishings. If these grown kids wanted to retain toys from their childhood or other mementos, they’d just have to bid along with everyone else. Unresolved inheritance issues like these can cause serious rifts between family members even with relatively simple estates. That’s why good estate planning may include drafting a Letter of Instruction or a formalized version for inheriting just personal property called a Personal Property Memorandum.

“Simple Steps to Prevent Future Family Inheritance Rifts,” a recent article in Forbes, explained that typically, personal assets like jewelry, cars, and furniture aren’t included in a will because listing everything can be tedious and unnecessary. But there are two types of documents that can help make sure that these tiny details are as you want.

A Personal Property Memorandum is a legally binding document. It is to be referred to in the will that is to list all the personal property you want to leave to your heirs and loved ones. A personal property memorandum is recognized in 30 states and must be referred to in the will. But the document doesn’t need to be notarized or witnessed. The article suggests that you clearly describe these items so they aren’t confused with others. For example, “All of the Barry Manilow LPs in my collection are to go to Cousin Buddy.” Make sure your executor or executrix has the correct information, as well. You don’t want the wrong relative to walk off with your disco records!

The second document is called a Letter of Instruction. This is a non-legally binding document that you can create to convey any specific wishes. You may not be able to create a legally binding document to bequeath personal property, so this letter can be a terrific tool to detail the disposal of these things. Here are the types of items that you may want to include in a Letter of Instruction that might not be contained in a Personal Property Memorandum. The article says to think of a Letter of Instruction as a “cheat sheet” to estates. It might contain the following:

  • The location of important legal documents;
  • All pertinent contacts for legal, tax and financial information and advice;
  • Any prepaid funeral arrangements;
  • Burial or cremation wishes; including hymns or speakers you’d like at your memorial;
  • A list of financial assets with the beneficiaries and account numbers, PINs, usernames and passwords where applicable;
  • The location of your latest tax return and Social Security statements;
  • Safe deposit box locations and keys; and
  • A list of instructions regarding insurance proceeds, trust provision explanations, and business succession plan notes.

The article also suggests that you leave a list of contact information for people who should be notified of your passing.

Personal Property Memorandums and Letters of Instruction can be pretty easy to create and to change. They can be a big help to your loved ones after you pass away.

For more information about estate planning, please visit my estate planning website.

Reference: Forbes (July 17, 2015) “Simple Steps to Prevent Future Family Inheritance Rifts”

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