Most people know they need to make a will, but there’s another essential document you should also create and update every quarter.

It has no legal standing, so it can not supersede a will, but a letter of intent, or letter of instruction, is a more personal and detailed document that you need to keep on hand in case of emergency. It should include everything from your passwords and PINs to the music you want at your funeral. Give a copy to your spouse, partner, child or closest friend and to your executor.

I’ve had one since my early 20s, even when I was single and owned few assets. But I was traveling the world, often far from home, sometimes in rough conditions and often alone; if anything happened to me, others needed to know what to do with my belongings, my dog and even my body.

Your Words, Your Wishes

Like a will, this is a document you can tailor any way you wish. Mine also includes my medical history, (all physicals, tests and surgeries with dates, results, and names and phone numbers of every physician), even my blood type. It lists my driver’s license, Social Security number and passport number, and the dates of expiry for each. I've also included all outstanding debt, with the amount I currently owe and the interest rate or APR.

Unlike a will, which is accessed only after your death, a letter of instruction can be extremely helpful in other emergencies – an accident or medical situation that leaves you unable to communicate, for example.

It should include:

  • A complete list of all your assets, including property such as artwork, boats, vehicles, jewelry and finances such as cash, mutual funds and other investments
  • Some rough idea of your goods’ current market value (easily determined by an appraiser). You can even include where your heirs can sell them, such as the names and contact details of appropriate auction houses
  • The names, passwords, PIN numbers and account numbers of all your liquid assets, including bank, brokerage, retirement and investment accounts
  • The passwords for all your email and social media accounts
  • The names and contact information for any bankers, brokers, attorneys or other professionals who handle your assets.
  • Informal information regarding the dispersal of assets, such as who would get a sentimental possession or heirloom; the will may state that these articles are to be distributed according to the letter
  • Preferred charities for donations, if you prefer these to flowers at your funeral
  • Where to find the most recent copies of all financial and Social Security statements, tax returns, and legal documents, such as wills and trusts
  • A list of all financial account beneficiaries and their contact information, if necessary
  • The location of all titles and/or deeds for real estate property, rental property, oil and gas leases, etc.
  • Your Social Security number
  • The location of your birth certificate, any divorce and/or citizenship papers (or applications)
  • The location (where to find the keys to) all safe deposit boxes
  • Contact information for all your creditors, including those holding mortgages, credit cards and car loans
  • Contact information for any and all insurance coverage, especially life insurance.
  • Care and placement of any pets
  • Contact information for all retirement account or estate beneficiaries

Little Known, But Valuable

Despite how useful these letters are, few financial professionals think to mention them, says Joanne Giardini-Russell, a financial planner in Farmington Hills, Mich., who introduces the concept to clients with the evocative term "ethical will."

“My industry does a very poor job of talking about important items,” she says. “They’ll show pie charts all day long, but not talk about the values of the person they are sitting with. They don’t like to talk about what’s important to people inside. Clients have heard the word ‘will’ and most of my clientele have a trust. I like the ethical will as sort of an overlay to the trust or will,” she says.

Giardini-Russell often shares her own letter of intent as a template. “Client reaction is amazing – it’s such a simple thing to create and they look at me like I’m a genius,” she says.

“This is not a well-known thing,” agrees Isabel Miranda, a lawyer specializing in trusts and estates in Bloomfield, N.J. “In the old days, this sort of document was normal, as people would specify where they wanted to be buried, if at all, whom to notify upon their death and what special gifts to make. It’s a private document, as opposed to the public nature of the reading of the will,” she explains.

Ms. Miranda urges everyone to create one for its emotional value as well; she treasures the letter of intent hand-written by her late grandfather, Paulino. “It’s the last thing a person is saying in their own words. It’s a moral obligation.”

“People tend to pour their heart into them. They tend to be very, very personal,” she says.

What else should you include, beyond financial and logistical basics?

Leaving an emotional legacy

“The document is simply some of the things that we normally may not say, but they’re important things,” explains Giardini-Russell. “I recall a friend’s mother-in-law passing away – and she’d been sick for months. In planning the funeral the big dilemma was, ‘What side dish would Carol have liked with the ham?’ They decided on coleslaw. The little things have the surviving family completely perplexed.

“The best part of these documents is that the person is writing it, and you don’t have to go to the attorney to have it done," Giardini-Russell adds. "It’s a supplement to a will or trust; it doesn’t replace those items, but it can put a warm and fuzzy face on the document.”

Making time to create an ethical will also preserves your voice, says Miranda. “We never write letters anymore – when was the last time you wrote a letter? Although a letter of intent doesn't have to be hand-written, to have something in your loved one’s handwriting is very precious.”

The Bottom Line

A letter of intent is a useful and helpful adjunct to legally binding documents, such as a will, living will and medical proxy. It adds a personal voice to your legal documents and can offer a simple place to store essential information. Like other such documents, it should be reviewed and updated as needed, every quarter at a minimum.

Related Articles
  1. Personal Finance

    What Baby Boomers Need To Know About Making Out A Will

    Squarely addressing the prospect of your own mortality can be upsetting enough. But the financial questions surrounding what and how to arrange for one's heirs are disconcerting, too.
  2. Retirement

    What Is A Will And Why Do I Need One?

    Putting this document together will save your family time and money, and give you peace of mind.
  3. Retirement

    Why You Should Draft A Will

    Don't trust the courts to follow your wishes - plan the distribution of your own assets.
  4. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  5. Savings

    What is a Bounced Check?

    Bounced check is a slang term to describe a check that cannot be processed because its writer has insufficient funds.
  6. Professionals

    Top Tips for Helping Clients Through a Divorce

    It may take a delicate touch to properly assist clients who are going through a divorce. Here are some tips.
  7. Retirement

    What Does It Cost to Retire in Panama?

    Learn how much it costs to retire comfortably in Panama, and why it has become one of the most popular retirement destinations in the world.
  8. Investing

    Baby Boomer Philanthropy Shifts Wealth Adviser Focus

    Wealth advisers who integrate philanthropy and finance planning can stand out with baby boomer clients.
  9. Retirement

    The 5 Best Retirement Communities in Dallas, Texas

    Discover why the Dallas/Fort Worth area of Texas is a popular retirement destination, and five of the best retirement communities in the area.
  10. Investing

    Why Is Financial Literacy and Education so Important?

    Financial literacy is the confluence of financial, credit and debt knowledge that is necessary to make the financial decisions that are integral to our everyday lives.
  1. What content does a letter intent have to have?

    Letters of intent vary in purpose and content depending on the dealings between the involved parties. In a basic form, each ... Read Full Answer >>
  2. How legally binding is a letter of intent?

    A signatory may be bound to a letter of intent depending on how the letter is drafted. In a business-to-business transaction, ... Read Full Answer >>
  3. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  4. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  5. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  6. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!