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North Carolina Letters of Instruction: Part1


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A letter of instruction is an estate planning tool with which many people are unfamiliar, but which nevertheless plays an important role in the estate planning process. Learn more about North Carolina letters of instruction in this presentation.

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North Carolina Letters of Instruction: Part1

  1. 1. “A letter of instruction is an estate planning tool with which many people are unfamiliar, but which nevertheless plays an important role in the estate planning process.” NORTH CAROLINA LETTERS OF INSTRUCTION PART 1 CHERYL K. DAVID North Carolina Estate Planning and Elder Law Attorney
  2. 2. North Carolina Letters of Instruction –Part 1 3 A good letter of instruction can be one of the most important estate planning tools you create, even if it doesn't have the same legal powers as the other vital devices you include in your plan. To help explain what a letter of instruction is, why it can be so useful, and what role it can play in your estate plan, today we begin the first of a two- part discussion on this important estate planning tool. SHOWING THE WAY
  3. 3. North Carolina Letters of Instruction –Part 1 4 It might be easiest to think of a letter of instruction as a kind of road map. A letter of instruction contains bits and pieces of information that might otherwise go left out in your broader estate plan. When we take a step back and look at the estate planning process from a broader perspective, every tool you create as a part of your plan is designed to address issues that occur either after you have died or after you have become incapacitated. In both of these situations your plan will rely on others to carry out your wishes and represent your interests. These representatives will be called upon to perform specific tasks depending on what the circumstances are, and what kinds of authority your estate plan grants. So, when it comes time for others to represent your interests, will they have the information they need to go about their business as easily and as quickly as possible. For example, if you have included a durable financial power of attorney in your estate plan, your agent will be called upon to manage your property and financial affairs in the event you become incapacitated.
  4. 4. North Carolina Letters of Instruction –Part 1 5 Should that happen, will your agent know what to do? Will your agent know what banks hold your financial accounts? Will he or she have the information needed to access such accounts? Will your agent know who your lawyer is, or your banker, or your doctor? If not, how will your agent find that information out? A letter of instruction is designed to answer these kinds of questions. While we will go into more detail about the kind of information you include in your letter in our next session, for now what you need to understand is that the letter itself is really just a way for you to pass on vital information to those who will be responsible for managing or carrying out your estate plan. OF LETTERS AND LEGALITY A letter of instruction can be one of the most useful tools you choose to include in your plan, but it's important to understand how it's different than the other tools upon which your plan might rely. Letters of instruction are informal estate planning tools,
  5. 5. North Carolina Letters of Instruction –Part 1 6 meaning there is no specific law that addresses them or imposes requirements you must meet in order to create them.This means that, should the time ever come when a judge is asked to rule on the validity of your letter of instruction and the wishes it contains, the court will not enforce the letter's provisions. Unlike, for example, a last will and testament, your estate plan cannot be relied upon as a legally valid estate planning tool. However, this legal informality is also one of the letters of instructions greatest assets. Because there are no requirements that come with making a letter of instruction, you are free to use them when and how you like, include whatever information you like, and change them whenever you like. YOU NEED TO MAKE YOUR LETTER WITH YOUR ATTORNEY'S GUIDANCE
  6. 6. North Carolina Letters of Instruction –Part 1 7 A good letter of instruction is one that compliments your estate plan, and aids those who will be asked to carry out the wishes you expressed in your plan. Though the letter itself is an informal tool, it often serves as the plan's linchpin, bringing all of the other pieces of your plan into focus so that your representatives will be able to easily manage your estate. So, to craft a letter of instruction that does what it is intended to do, you need to make it in light of the other estate planning tools you and your attorney have decided to include in your plan. In other words, you cannot simply rely on your letter of instruction as a standalone estate planning device, nor can you make it without knowing what your other estate planning devices do.
  7. 7. North Carolina Letters of Instruction –Part 1 8 If you'd like more information about letters of instruction, want to get started on crafting an estate plan, or want to know what you can do to make your letter of instruction more useful, contact us so we can discuss it.
  8. 8. North Carolina Letters of Instruction –Part 1 9 ABOUT THE AUTHOR Cheryl David is a graduate of UNC-Chapel Hill, the University of Baltimore School of Law, and the prestigious Trial Lawyer’s College presided over by Gerry Spence. A former Administrative Judge, Cheryl is certified as an Estate Planning Law Specialist by the ABA accredited Estate Law Specialists Board, Inc. She is also a member of the American Academy of Estate Planning Attorneys, Medicaid Practice Systems and the National Academy of Elder Law Attorneys. In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations. Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families. 528 College Road Greensboro, NC 27410 Phone: (336) 547-9999 Fax: (336) 547-9477 WWW.CHERYLDAVID.COM