A properly drafted Letter of Wishes can be helpful for your family and estate planning

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My wife, Carolyn, owns some impressive dishware and cutlery that she has collected over the years. It’s not my thing (although I’m glad to eat a good meal using the stuff). When we’re no longer around, she wants to leave certain pieces to certain kids, and plans to put this in writing. She calls it her “Letter of Dishes.”

I convinced her that a Letter of Wishes – an informal, non-binding document that can accompany your will – is the right place to share this information. It can help to communicate your intentions and reasoning for your estate planning after you’re gone.

For our letter, I told my wife that we’ll do it together. After all, I also need to share my thoughts about who should inherit my Elvis clock, garden gnomes, hockey equipment and guitars.

Last week, I introduced the idea of a Letter of Wishes, and the benefits of drafting one. Now, I want to share what the contents might look like.

The contents

Your LOW can be highly personalized, but consider using the following as a guide to what you should include in the letter where these items are applicable:

1. Introduction: State the purpose of the letter – perhaps it’s to provide guidance to your executors, trustees, beneficiaries and guardians around how you’d like your estate and responsibilities handled. Acknowledge that your will legally governs your estate, but that you hope and expect your LOW to be helpful.
2. Funeral and memorial wishes: Do you have specific wishes about your burial, cremation, or any other funeral and memorial services? Perhaps preferences around the location, music, scripture, poems or other readings? Share these. And if you’ve paid for prearranged funeral services, let your family know.
3. Personal messages: You might include a section with letters to your spouse or partner, children, grandchildren, and close family or friends. Consider sharing ethical or spiritual guidance, values, life lessons and family traditions in these comments.
4. Guardianship guidance: If you have children who are minors, consider sharing your thoughts for their new guardians, including comments about faith, religion, education, family values and health issues. Also think about describing your hopes for athletics, arts and nutrition, maintaining connections to other family, and financial guidance (especially if you’re leaving funds in trust; share priorities for spending and attitudes about money).
5. Distribution guidance: Give direction on specific personal belongings or sentimental items that aren’t dealt with in your will. You don’t have to name every single item you own – just the more significant things. And if beneficiaries are not receiving equal distributions, be sure to share why this decision was made.
6. Executor/trustee guidance: Where there will be ongoing trusts, consider providing guidance to trustees around discretionary distributions for things such as education, housing, travel and support for beneficiaries. You might also want to write guidelines for investment philosophy, including risk tolerance and types of investments.
7. Charitable guidance: If you’ve left part of your estate for charitable purposes, you can communicate to your executor which charities you’d like to support if this is not dealt with in your will, or your general philosophy of giving, to help support those decisions.
8. Digital assets: Your letter can identify the location of online accounts and information about passwords (it’s best to use a password manager and to share those details in your LOW), and give direction on how to handle social media, email and cloud accounts.
9. Practical information: You should share the location of important documents such as your will, powers of attorney, insurance policies and property deeds. Also, provide contact information for professionals (your accountant, lawyer, financial and insurance advisers, and portfolio managers), the location of any physical safety deposit boxes, keys or access codes, and a list of bank and investment accounts.
10. Closing thoughts: Finally, you might want to share expressions of love, gratitude, encouragement for family unity and any final wishes.

The nuances

Keep in mind, a LOW is not legally binding for your executor, trustees, beneficiaries or guardians. So, your wishes may not necessarily be carried out. Having said this, if there was ever a question as to your intentions and the matter ended up in court, your letter would certainly be a document that could be examined to better understand your thinking.

It’s important to ensure your LOW doesn’t contradict or conflict with your will. This will only cause confusion. In the end, the wording of your will rules the day since it’s legally enforceable, but don’t give those who survive you reason to end up in court because of a contradictory LOW.

Also, review your letter annually. Update it every once in a while and certainly after major life changes such as marriage, divorce, births, deaths, moves or financial changes. Keep a copy of your LOW with your will, but also provide a copy to your executor, trustees and close family each time you update it.

Finally, your tone matters. Your letter could be read when emotions are high. So, aim for clarity, warmth and encouragement – rather than control or guilt.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca.