When it comes to the world of estate planning, it’s easy to find yourself lost within all the convoluted terminology and excessive processes. From establishing your will to picking the right trustee, there’s a lot that goes behind estate planning, and sometimes it can come off as a bit much. For those that are unfamiliar with the term estate planning, the process of estate planning is essentially arranging the management and disposal of ones’ assets and owning in the case of their death. This can involve anything from drafting ones’ will to ensuring that ones’ assets are appropriately distributed. One of the many aspects of estate planning is drafting a letter of intent for the distribution of your assets and properties. Like everything else that goes with estate planning, letters of intent can be a complicated process that may be confusing for most when it’s not adequately explained. Luckily, that’s why you have us. Here is everything you need to know in order to understand letters of intent.
What A Letter Of Intent Is
To put it simply, a letter of intent is essentially an agreement to agree. They are drafted in order to make two combating parties come together through a central agreement. As the name would suggest, letters of intent are documents that suggest both parties later intend to enact some sort of action or dialogue. Letters of intent are ultimately not binding and end up being unenforceable. The agreements that letters of intent draft are usually intended to have someone do or refrain from something. Letters of intent are traditionally looked down upon within the legal world due to how ambiguous and interpretive they can be. Ultimately, letters of intent are used to bring together two opposing parties to find common ground or some sort of compromise.
The Pros Within Letters Of Intent
Like many legal documents, letters of intent hold a handful of pros as well as a handful of cons. Within most drafting of contracts, a number of things are discussed and brought up within the negotiation process. A letter of intent helps put all of the requirements and concerns of both parties into specific writing and terminology. Letters of intent are also known to specify certain issues and conflicts regarding any payment issues or concerns. This puts every agreement between the two parties into specific writing, so there is no conflict later down the road. Letters of intent also act as a safeguard just in case any deals or agreements fall through during the legal process.
Downfalls With Letters Of Intent
Even with all of the pros, letters of intent come with a handful of cons as well. One of the significant downfalls with letters of intent is the fact that they are usually open for public disclosure. This may result in certain obligations among the two parties being waivered or even derailed. Another specific con with letters of intent is the amount of time and effort it takes to create one. This ends up distracting from the main issue and conflict at hand for the number of parties. It’s crucial to keep downfalls like these in mind before you move forward with drafting a letter of intent for your estate planning.