Why a Letter of Intent is Crucial

Close up of a person writing a letter of intent.

A letter of intent (LOI) can be a valuable piece in your estate planning, and although it is an informal letter, it can more fully represent your financial and personal intentions after you die. Everyone knows they need to make a will, but this lesser-known document can also be a crucial estate planning tool.

What is a Letter of Intent?

The letter itself has no legal standing, so it can't supersede a will. Still, a letter of intent, also called a letter of instruction, can be of enormous practical and emotional value to your loved ones. A letter of intent conveys essential information about personal and financial matters in combination with your will. Since letters of intent are not legally binding and do not replace a will or trust, they are not a requirement; however, they are an excellent complement to those legal documents.

A parent may write an LOI to express their hopes and dreams for their children in detail if both parents die, mainly when their children are still minors. An LOI often influences family court judge's decision-making concerning children. Particularly, if you have a child with special needs, an LOI can outline how to help create a more stable world for your child's future challenges. The letter may outline a child's current needs and routines and any aspirations the parents have of their future employment, relationships, and independence of living under the oversight of a named guardian in the parents' wills. It is crucial to have an estate planning attorney review any LOI in the circumstances of minor children to ensure it echoes the same structure and sentiments of your will. McCreary Law Office provides a guided worksheet for parents of minor children who elect to use a Planning for Minor Children package to help you put these hopes in writing.

Drafting a letter of intent is also for more general purposes, guiding your family to understand your intentions after you are gone. For instance, you may want to include funeral and burial arrangement information in your LOI. This includes outlining whatever plans you have regarding the type of viewing and funeral service you prefer, if any. This should also include whether you desire cremation or burial. Your letter of intent may include who you want to officiate your funeral service and include special touches like seating arrangements for family, specific religious passages, and music selections. You can also request your family members inform people of your passing by providing their names and contact information in a list. For clients who elect a plan beyond just the essentials, McCreary Law Office offers a worksheet to guide you through writing down these areas.

What Does a Letter of Intent Include?

Another type of letter of intent can also be an ideal method for leaving information about bank accounts, personal assets, and any hidden stashes of cash or precious metals. For bank accounts and the like, please list the names and contact information of the professionals familiar with your accounts to help your family locate them. Remember to include the physical location of all relevant documents such as your will, trust documents, titles, deeds, insurance cards, driver's license, birth certificate, marriage license, divorce documents, military paperwork, social security card, passport, mortgages, and outstanding debt. It is better to include too much information rather than too little. Your family needs as much data as possible to piece together the details of your estate. McCreary Law Office encourages clients to store this information in the portfolios provided for clients where their estate plan is kept.

Do not forget to include relevant digital information in your LOI. Much of our lives now reside online; therefore, leaving access to information to your digital assets is very important. Include login URLs for digital accounts such as cryptocurrency, email, social media, income-producing storefronts, or influencer accounts, and the devices themselves such as smartphones, tablets, and laptops or PCs. Provide user names and passwords, PINS, and account numbers for each account. Make plans to gift these devices if you desire and list which individual receives which device. While a will does not necessarily need to be kept in a locked safe, this detailed information about passwords should be securely stored.

Your personal items, particularly sentimental ones, may become a source of contention among your loved ones. Whether jewelry, artwork, fine china, or other valuable collectibles, it is best to sort out to whom these items will go and include that list in your letter of intent. For personal property, clients with planning above just the essentials will receive memos (in Florida) or language for handwriting their own memo (in Texas). You may also include wishes for the care of any surviving pets you might leave behind. Your letter is your final opportunity to include personal statements about your property division and your hopes and wishes for the future to individual family members.

Coordinating your Letter of Intent with Your Overall Plan

Make sure that your letter of intent does not contradict your existing estate plan. Your LOI may be changed whenever you prefer throughout your lifetime, and it is good to revisit its contents as you accumulate more assets and should your feelings change as to who shall receive what. As you update this, it can also be helpful to let your agents know. A thoughtful LOI can be an authentic source of comfort and peace to your family during their time of grief. If there is a disparity in your bequests, a letter of intent can help your family come to terms with your decision-making process and help loved ones move forward.

If you would like to discuss creating your estate plan or these extra pieces that can serve as your letter of intent, please give McCreary Law Office a call. Please contact McCreary Law Office or call the Jacksonville, FL office at 904-425-9046 or the Houston, TX office at 713-568-8600.

Attorney Jana McCreary

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Houston Estate Planning and Elder Law Attorney Jana R. McCreary has been an attorney for over eighteen years, a career move she made after working for over a decade with adults and children with intellectual disabilities and mental illness. Graduatin… Read More

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