Benefits of Writing a Legacy Love Letter to Heirs

The death of a loved one can be a difficult time for any family. Even as people mourn, they're faced with the daunting task of settling the deceased's estate—all while trying to understand and respect their loved one's final wishes.

A will or trust document may not necessarily communicate the reasons behind your estate plans, potentially leading to confusion or family tension after your death. One way to help provide clarity is to write a legacy letter, or what I like to call an "I love you letter." This is not a formal estate-planning document per se but a personal letter in your voice, expressing your wishes, instructions, and perhaps telling your family how much you cherished them and what you hope for future generations.

Ideally, it will also offer vital information to make things easier for those who take over your affairs, along with explanations for why you organized your estate the way you did. It might also address any areas of possible conflict.

Here are five topics to consider for your letter. You don't have to include them all—just take what works for you.

To start, ask yourself what information your loved ones would need if you weren't there to guide them and provide the information they'll need to access your personal estate documents: your date of birth, Social Security number, passport number, driver's license number, and any relevant employee identification number. Also include the location of your birth certificate, any marriage certificates, and your latest tax return. Be sure to include login information to access your digital records, such as usernames and passwords to your computer, phone, email, bill-paying apps, and social media accounts.

You should also make a contact list of the people your family may need to reach: accountants, lawyers, trustees, trusted friends, and the executor of your estate. Describe the services these individuals provide and any specific information they may have that could be helpful. In doing so, you can also explain why you work with these individuals—especially your choice of executor or trustees, to avoid distress among family members.

Next, make a list of your accounts, including bank accounts, safe deposit boxes, investment accounts, retirement accounts and pensions, insurance policies, real estate, cryptocurrency, stock options, and veteran benefits. You can capture most of these details using Schwab's Asset Inventory Worksheet, which can be a great addendum to your love letter.

For accounts not listed on the worksheet, be sure to include:

• Location (and advisor, if applicable)
• Title or ownership
• Account number
• Beneficiary designation or transfer on death certificate
• Usernames and passwords for digital access

For real estate or business interests, include location and type, percentage of ownership, and note the location of deeds or partnership agreements.

Your formal estate plan—your legal will, beneficiary designations, and trust information—likely covers the most valuable assets that you intend to pass to your heirs. But typically there is also a house full of possessions that will need to be divided or disposed of, regardless of their monetary value. And too often, it is items of emotional significance that can be sources of family strife.

Your letter is a good place to explain any decisions about who should get specific items, especially those possessions that are not designated in will or trust documents. For example, if you are leaving a piece of art to someone because you know it has special meaning for them, say so. Whatever you decide, inform your estate-planning attorney about the list and ask them to cross-reference it against any of your legal documents to make sure your plans align.

You might also weigh in on how to handle all the remaining items that no one wants, perhaps by holding an estate sale or donating them to a nonprofit of your choosing. Although it may seem like a small detail, it is one more decision your survivors don't have to make.

If you haven't addressed the topic with family, they'll want to know your preferences for a funeral or memorial service, and for burial or cremation. Do you want something specific to happen at your service, or have a particular speaker in mind? Is there a location you desire for the service? Are there details you'd like included in your obituary, such as charitable donations or personal anecdotes? Sometimes these details will already have been discussed at length, but even so, it may make sense to spell them out for those who need to make arrangements.

Additionally, if you've purchased a burial plot, tombstone, or funeral services in advance, you should provide contact information and relevant paperwork.

This might be the hardest part of the letter—but also the most important. Taking the time to reflect on your personal values, life experiences, family history, and memories can be both a comfort and a gift to your loved ones. The letter may never feel perfect to you, but whatever heartfelt message you share is likely to be treasured by your family.

You could start by explaining your estate-planning decisions and expanding on your vision for your family's future and the wealth you're passing down to your heirs, or the lasting legacy you're shaping with donations to charity. You can go further and express gratitude, share life lessons, and include any family stories, recipes, news clippings, pictures, or other mementos.

Developing and crafting this section may take time and even require several drafts. If you feel more comfortable expressing yourself verbally rather than in writing, you might record a video. If you go this route, make sure someone has the link to the file or knows how to access the video.

To be sure, putting these details down in writing creates a significant security issue, so it's important to know how to safeguard your documents. If you plan to store the letter digitally, it should be on a password-protected drive; if it's a paper copy, lock it in a safe or safe deposit box.

You'll probably only want one or two people to have the password to the file or the combination to the safe. These should be people you trust completely, such as a spouse, child, or your executor.