Letter Of Wishes
A Letter of Wishes (LOW) is also known as a Memorandum or Statement of Wishes.
🌿Purpose: A letter of Wishes is typically used by someone setting up a trust (the settlor) or making a will that includes a trust (the testator). It guides trustees in managing trust assets. While there are no strict rules, it should not conflict with the terms of the Will or trust. It is also very useful to support Powers Of Attorney with additional guidance.
🌿Guidance for Trustees: For discretionary trusts (where trustees have broad discretionary powers), it guides them on issues such as which discretionary beneficiaries should benefit, when, and on what terms.
- It allows the testator to express intentions regarding:
- Gifts to be made by the executors (money or personal possessions).Prioritisation of beneficiaries.
- Use of trust assets for maintenance, education, or long-term benefit.
- Duration of the trust, investment strategies, and distribution of income.
- If someone has intentionally been left with nothing or less than other beneficiaries, the Memorandum of Wishes can explain why. This can help during probate and reduce the likelihood of a successful challenge against the Will.
🌿Guidance for executors relating to Pets.
Clients with specific pet care requirements should consider leaving a LOW alongside their will to guide the animal's recipient, whether this is the object of a specific gift or the executors of the will.
The guidance may range from things the testator wishes the executors to consider when rehoming the animal to specific details of the animal’s medical care needs and vaccination records. Anything that the testator deems essential to the animal’s care and upkeep to the same standard as the testator would have done.
A LOW is a useful tool if there are multiple pets with differing requirements that the testator is leaving to their executors with a wish that they make arrangements for them. The testator’s guidance in a letter of wishes will be useful to the executors in finding a suitable home for them and also to the eventual recipient of the animals. The LOW should ideally also provide details about the pets and their current care.
It is recommended that the following details be included in a memorandum of wishes:
- Breed
- Age (at time of will)
- Microchip ID (if applicable)
- Registered vet
- Feeding requirements
- Medical needs, e.g. allergies, regular treatments, known illnesses
- Behavioural issues
- Medication
- Setup requirements, e.g. heat and UV requirements for exotics.
🌿Guidance for Attorneys: For Powers Of Attorney, the guidance above could clarify or provide more detail to the preferences or instructions sections. Of course, those sections must also be carefully written.
For example, with Property and finance, it could allow for gifts to be made during the Donor's (Client's) lifetime. For health and welfare, it could give more detailed daily care preferences.
🌿Legally Non-Binding: A LOW is not legally binding, but trustees and attorneys must consider it and usually follow it.
Trustees and attorneys often find it reassuring and helpful to know they follow the testator’s wishes. It helps them make important decisions as if the testator were in the room.
🌿Confidentiality: A LOW can be kept confidential from beneficiaries. Banks and other institutions see copies of the LPAs, though they do not usually need to see a letter of wish.
🌿Flexibility: A LOW provides remarkable flexibility. Unlike formal amendments to a will or trust deed, it can be changed without legal formalities. This flexibility allows you to adapt your wishes as circumstances evolve, ensuring that your intentions remain up-to-date.
🌿Risk of Separation: One of the most significant risks associated with a Memorandum of Wishes is that it might separate from your will. Since it exists as a separate document, there’s a chance it could get lost or overlooked.
To mitigate this risk, consider storing your LOW professionally alongside your Will. This ensures that it remains accessible and aligned with your overall estate planning.
🌿Challenges to Your Will: If you anticipate potential challenges to your Will, the LOW can explain your decisions. Along with a clearly drafted Will, a LOW reduces the chance of successful challenges.
🌿Importance in Trusts: At Fern Wills & Trusts, we strongly recommend creating a Letter of Wishes for every Discretionary or Life Interest Trust. It is also advantageous as a guide for Guardians of children or executors distributing pets.
🌿Remember that while a Letter of Wishes is helpful, it is not a replacement for a Will or Codicil (an amendment to a Will). If you have specific wishes that must be followed or higher-value gifts, these should be included in your Will.
