The Letter of Final Instruction (LOFI) should be a major part of everyone’s estate plan. Unfortunately, I rarely see one when reviewing a client’s financial documents.
The LOFI isn’t a legal document like a will or trust. It is simply a document that provides your family with guidance upon your death on little things that wouldn’t necessarily go into a legal document. It is a godsend for family members, especially after a sudden, unexpected death. I have seen many a family become completely stressed out and overwhelmed when dealing with the aftermath of a death of a loved one.
The LOFI provides important information to heirs, such as location of safe deposit box keys, insurance policy info, financial account numbers, online passwords, etc. It also allows you to direct where you want your personal belongings to go to, such as your 100-year-old china set or your vintage ‘65 Mustang. These items typically aren’t specified in a will or trust. However, you can reference a LOFI in a will or living trust. That way, if you need to make changes, you can simply change the LOFI without having to amend the will or trust, since that takes the assistance of an attorney.
The LOFI should be distributed to all immediate family members and updated annually, if needed. I keep mine as a pdf file on my computer as well as a hard copy that I leave on my desk when I travel.
If you want to get started on writing up your LOFI, here is a link to a very comprehensive checklist of what you should include: https://www.cals.uidaho.edu/edcomm/pdf/CIS/CIS0958.pdf.
You can also just do an internet search for letters of final instructions, and you’ll find a bunch of resources to use.
Get going on this, even if you don’t have a will. Something is better than nothing. Having a LOFI for your family will give you peace of mind and will help your heirs deal with settling your estate without all the stress and confusion.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
