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What is a Letter of Wishes?
A letter of wishes is a non-legally binding document that you draw up to accompany your Will. You can either do this at the time your Will is signed or at any time afterward. Its purpose is to provide guidance to your executors and trustees on how you would wish specific matters to be dealt with. They may be used to provide guidance on how chattels should be allocated, how a discretionary fund should be used, or even who may be favoured or ignored, and for what reasons.
While they are not legally binding, cases have shown that letters of wishes can exert a strong influence on the Court, but not always a positive one from the Testator’s point of view.
Challenge
If somebody is overlooked as a result of wishes expressed they may seek redress through the courts on the basis that the trust us not being managed, or the funds distributed, properly. Essentially they could claim too much weight is being given to a document which is a guide only; it does not create an obligation for the trustee or trustees.
While each case must be viewed on its facts, the most recent case on this issue to find its way to the Supreme Court, found the justices reinstating the decision of the original trial judge who had been influenced positively by the Testator’s wishes.
Should I consider a Letter of Wishes?
Put simply, letters of wishes can be very helpful, but caution must be taken in the drafting. It is essential that they reflect the terms of the Will or trust deed, and contradictions should be avoided – if they don’t match, one of them has to be wrong.
Remember, they do not have to be so comprehensive as to address every conceivable scenario. As they are only ‘wishes’, they should be succinct and provide guidance and not necessarily direction. Where relevant, they should also contain the reason for a specific direction. While taking legal advice is not necessarily essential in drafting a letter of wishes, it can certainly help to avoid potential pitfalls.