A letter of instruction -- or LOI for short -- is a frequently overlooked possibility in New Jersey estate plans. However, the inclusion of an LOI typically provides general guidance to the person or persons in charge of an estate after one's death.
While an LOI is not legally binding in any form, it is a letter that highlights your desires and other important information for heirs. But make no mistake: the letter of instruction is not intended to replace other estate planning devices such as wills or trusts. It is simply a supplement to the official estate plan and serves as a deeper explanation of one's wishes as they are outlined in the plan.
A letter of instruction can involve just about anything you want, including anything from PIN numbers and access codes to military discharge papers and even online usernames and passwords. Military discharge papers are especially important for veterans to leave behind so that the burial and funeral costs can be reimbursed. Also, the LOI might include information that gives your estate administrators access to important documents such as birth certificates or adoption certificates.
While an LOI is not mandatory, New Jersey residents may do well to include one in their estate plans. Doing so can provide an extra level of clarity and guidance to heirs, explaining why you've made the choices in your will. In addition, a letter of instruction can effectively alleviate some of the stress on your loved ones as they examine the estate and cope with their loss. Careful estate planning often involves many tools and options, and a letter of instruction can not only give you the peace of mind that comes with clarifying your wishes and personal information; an LOI can also help loved ones better understand your estate-planning choices.
Source: Times Herald-Record, "Bonnie Kraham: Add a letter of instruction to estate plan," Bonnie Kraham, April 8, 2012