estate planning
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A letter of intent is an informal document that outlines what a person wants to happen to their assets after they pass away. It serves as a guide for executors and beneficiaries but is not legally binding like a will. Letters of intent are commonly used in estate planning to supplement formal documents like wills and trusts.

Purpose of a Letter of Intent

A letter of intent communicates wishes and goals for an estate. It can provide valuable insights and direction when distributing assets that are not specifically addressed in a will or trust. Common purposes of a letter of intent include:

– Expressing desires for personal property distribution – A letter can specify who should receive specific items like family heirlooms, collections or jewelry. This extra guidance can help avoid conflicts over cherished possessions.

– Explaining intentions for asset allocation – Details on how you want assets divided among heirs can clarify your wishes. This can be useful if you want assets split unequally between children.

– Describing plans for business succession – Passing a business to the next generation is complex. A letter can outline your succession wishes and transition recommendations.

– Providing background details – Explanations on your relationships, values and past decisions can provide critical context for executors. This helps them make appropriate judgments when interpreting your formal estate documents.

Contents of a Letter of Intent

While letters of intent can be customized, they commonly contain:

– An introduction summarizing its purpose

– Instructions on personal property distribution – Specify who should receive particular items. You may also include contingencies if certain beneficiaries predecease you.

– Explanations about asset division – Detail how you want particular assets like real estate, investments or bank accounts divided. Outline percentage splits or dollar amounts for each beneficiary.

– Business succession plans – Provide guidance for passing a business to heirs. Cover your recommendations for leadership succession, stock transfers and division of authority.

– Background and values – Share important life events, relationships and values that shaped your decisions. This provides essential context for executors.

– Location of documents – Provide details on where executors can find your formal estate planning documents, like your will or trust.

– Contact information – Include updated contact information for your attorney, financial advisor, executors and beneficiaries.

Benefits of a Letter of Intent

Key benefits of creating a letter of intent include:

– Adding context not in formal documents – Letters can share personal background and values that shaped your estate planning decisions. This context can help executors thoughtfully interpret your formal wishes.

– Explaining asset distribution – Letters provide an informal venue to explain your desired allocation of specific assets not covered in detail by your will or trust. For example, you can specify who should receive personal items like jewelry or art.

– Outlining business plans – Passing a business to heirs is complex. A letter allows you to share candid recommendations on succession planning, leadership transitions and other operational considerations.

– Avoiding family conflicts – By explaining your reasoning and wishes, letters can help minimize disputes between beneficiaries. Understanding your perspectives can make beneficiaries more accepting of any unequal distributions.

– Complementing formal documents – Letters reinforce and provide additional insights into your formal legal documents like wills and trusts. This extra guidance can assist executors carrying out your estate plan.

While not legally binding, letters of intent are valuable estate planning tools that allow you to communicate your personal values, intentions and preferences for asset distribution. By supplementing formal documents, they can provide critical direction to your executors and family when settling your estate.


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