What is a Letter of Instruction Fidelity Form and Its Importance?

Definition & Meaning of the Fidelity Letter of Instruction

A Fidelity Letter of Instruction (LOI) is a non-binding document that provides guidance to Fidelity clients regarding the management of their assets. It serves as a supplementary tool to formal estate plans, offering clarity on various matters such as fund transfers, asset distribution, and personal preferences. While it does not carry the legal weight of a will, it plays a crucial role in simplifying the estate settlement process by outlining specific wishes and instructions for executors and family members.

Key aspects of the Fidelity Letter of Instruction include:

• Asset Management: Clients can specify how they wish to manage their assets, including instructions on transferring funds between accounts or gifting shares.
• Estate Settlement: The letter informs executors or family members about important account details, online access, and any outstanding debts.
• Personal Wishes: Clients can detail their preferences for funeral arrangements and the distribution of personal property.

How to Use the Fidelity Letter

Using the Fidelity Letter of Instruction effectively involves understanding its purpose and how to communicate your wishes clearly. Here are practical steps to follow:

• Identify Key Areas: Determine which aspects of asset management you want to address. This could include specific accounts, types of assets, or particular beneficiaries.
• Document Your Wishes: Clearly outline your instructions, ensuring they are understandable. Use straightforward language to avoid ambiguity.
• Share with Relevant Parties: Distribute copies of the letter to your executor, family members, and any financial advisors involved in managing your assets.

How to Obtain the Fidelity Letter

Obtaining a Fidelity Letter of Instruction is a straightforward process. Clients can typically access the form through Fidelity's official website or by contacting customer service for assistance. Here are the steps to obtain the letter:

• Visit the Fidelity Website: Navigate to the forms section where you can download the Fidelity Letter of Instruction PDF.
• Contact Customer Service: If you prefer assistance, reach out to Fidelity's customer service for guidance on obtaining the letter.
• Consult Financial Advisors: Financial professionals can also provide you with the letter and help tailor it to your specific needs.

How to Fill Out the Fidelity Letter

Filling out the Fidelity Letter of Instruction requires careful attention to detail. Follow these guidelines to ensure accuracy:

• Personal Information: Start by entering your full name, address, and account numbers related to your Fidelity accounts.
• Asset Instructions: Clearly state how you want your assets managed, including any specific instructions for fund transfers or distributions.
• Executor Information: Provide the name and contact details of the person you wish to designate as your executor.

Key Elements of the Fidelity Letter

Understanding the key elements of the Fidelity Letter of Instruction can help clients create a comprehensive document. Important components include:

• Introduction: A brief statement explaining the purpose of the letter and its non-binding nature.
• Asset Management Instructions: Detailed guidance on how to handle specific assets, including bank accounts, investment accounts, and personal property.
• Personal Wishes: Information regarding funeral arrangements, distribution of personal effects, and any other personal preferences.

Examples of Using the Fidelity Letter

Real-world scenarios can illustrate the practical application of the Fidelity Letter of Instruction:

• Scenario One: A client specifies that their investment accounts should be liquidated and distributed equally among their children upon their passing.
• Scenario Two: A client details their funeral wishes, including preferred service providers and specific arrangements, ensuring their family is aware of their preferences.

Legal Use of the Fidelity Letter

While the Fidelity Letter of Instruction is not legally binding, it can still play a significant role in the estate planning process. Its legal implications include:

• Guidance for Executors: The letter provides executors with a clear understanding of the client's wishes, which can help avoid disputes among family members.
• Supplement to Legal Documents: It complements more formal legal documents, such as wills and trusts, by offering additional context and preferences.

Who Typically Uses the Fidelity Letter

The Fidelity Letter of Instruction is commonly used by various individuals, including:

• Individuals Planning Their Estates: Those who want to ensure their wishes are clearly communicated to their loved ones.
• Clients with Complex Assets: Individuals with multiple accounts or varied asset types who need to provide specific instructions.
• Families with Unique Circumstances: Families who wish to clarify personal wishes or instructions to avoid potential conflicts.