Atlanta Financial Blog

Explanation Letters

Michelle Thompson, JD, CFP®, CTFA
February 26, 2019

Writing a will or trust is strictly for legal tasks, such as naming your executor/trustee, beneficiaries of your property, and guardian for your children. As you think about your estate plan, you may find that you also want to:

  • Explain why you are giving property to certain beneficiaries and not others
  • Explain disparities between bequests or gifts
  • Express positive sentiments about a beneficiary or negative sentiments about a disinherited heir
  • Leave instructions for your digital legacy
  • Leave statement about your personal experiences, value, or beliefs

Using an Explanatory Letter

Although these sentiments are encouraged, they should not be included within the text of your will or trust, because adding general information, personal statements, or reasons for making or not making a bequest risks the possibility of producing a document with conflicting, confusing, or potentially even illegal provisions.

If it is important that you have a final say about personal matters without seriously risking your will’s integrity, we suggest that you write a letter to accompany your will expressing your thoughts to those who survived you. Because what you say in the letter will not have legal effect as part of your will, there is little danger that your expressions will tread upon the legal language of the will or cause other problems in the future. In fact, if your will is ambiguous, a judge make look to your letter to shed light on your intentions and to help clarify the will.

However, it is extremely important that the statements in your letter do not contradict the provisions in your will. Any contradictions could create interpretations problems after your death, which may lead to lawsuits and family turmoil.

Keeping these precautions in mind, writing a letter to your friends and family, explaining why you wrote your will as you did – and knowing they will read your reasoning at your death – may give you a great deal of peace of mind during your life. It may also assisting in explaining potential slights and hurt feelings of surviving friends and family members.

What to Include in Your Letter

What to include in your letter is completely up to you. It can be long or short, funny or intense, verbose or succinct. Below are some ideas of you might want to include:

  • An explanation as to why certain gifts were made to particular beneficiaries. You may also want to explain why a particular piece of personal property was gifted to that particular beneficiary.
  • Positive or negative sentiments. This is your time to “have the last word.”
  • An explanation about disparities in gifts, including why you left more to one person and less to another.
  • A statement in support or in opposition of a controversial issue.

Here at Atlanta Financial, we are dedicated to making life’s journey richer for you and your family.  Call me at 678-282-0296 for a complimentary consultation as part of our Second Opinion service.

Share This:

Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on twitter
Twitter
Share on google
Google+

CAN Money Buy Happiness?

For most of our lives many of us have heard the old adage “Money can’t buy happiness.” And we can all think of numerous examples of individuals where this certainly seems to be true – whether among the powerful and famous, or within our own family or group of friends. But is that really true? Research over the last few decades suggests “NO!” In fact, many studies show that in one sense money can buy happiness. But it’s not the amount of money we have, but rather how we SPEND our money that can indeed increase our happiness – although perhaps not in the way Madison Avenue or Amazon Prime would like us to think. First, let’s address the skeptics among you who feel sure that if you simply had MORE money you would indeed be happier. Statistics show that certainly isn’t true, since 70% of all lottery winners or those with a sudden financial windfall end up bankrupt within a few years.1 Carl Jung, famous psychologist, said in fact that the keys to happiness were five things.

Read More »

The New Tax Bill: Tallying the Results

“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets…

Read More »

How to Choose the Best Trustee for your Estate

No one enjoys thinking about what will happen after they’re gone, but we all want our families to be well cared for. Many people set up trusts to provide for their loved ones, but the trust is only as good as its trustee.Choosing a trustee is one of the more difficult decisions in creating your estate plan. Some attorneys suggest choosing several trustees to promote checks and balances, but sometimes choosing just one trustee can be difficult in light of family relationships and other factors. Choosing a trustee is a very personal and complex decision, but there are some basic guidelines one should consider.

Read More »

“Honey, I shrunk the tuition … burden”

It is that time of year again where school years are coming to a close and many parents are gearing up for a bitter-sweet high school graduation or are celebrating their child being one year closer to a hard-earned college diploma. Whatever the case may be, it is hard to deny the heavy lift education costs can be. You may not be able to shrink the bottom-line cost of attendance any further, and you surely can’t impact how fast many costs are going up, but, you can reduce the weight this line-item carries within your financial plan by remembering these 5 things:

Read More »