Your Wish Is My Command? Next Gen Wealth Is Discussed In ThoughtLeaders4 Private Client Magazine

• Published date: 05 September 2022
• Subject Matter: Wealth Management, Wealth & Asset Management
• Law Firm: Maurice Turnor Gardner
• Author: Joanne Morse, Eesha Arora, Sophie Wettern-Kirk and Maurice Turnor Gardner

The trustee's view

One of the first things we tell our settlors when they are thinking of setting up a trust is that they should always express their wishes regarding what they would like to happen after their death by writing a letter to the trustee, to guide them when they are exercising their dispositive powers. It comes with the usual caveat that we are not, of course, bound to act upon those wishes, but it is an important note to have on file and will be taken into account when making decisions. This can be helpful reassurance for settlors who worry about how matters will evolve after they have died, and there is some expectation that those wishes will indeed be followed, and that the trustees will not make a decision that is "perverse or irrelevant to any sensible expectation of the settlor"(1).

Best practice would tell us that this letter should be reviewed as life circumstances change, not be too prescriptive (so it could be construed as an instruction to the trustee) and acknowledged by and discussed with the trustee regularly so as to ensure the intentions behind the letter of wishes are clear and understood. But of course, whilst best practice can be encouraged, it does rather depend on the settlor.

Of course, one always comes across the settlor who finds the prospect of facing their mortality a difficult one, and so the drafting of the letter of wishes is always a task put off for another day. Usually, it is the formality of having to put wishes down in writing which tends to invoke this reluctance. Without some guidance, trustees could be left in quite difficult circumstances where the class of beneficiaries is wide and when family tensions were known. We do see this from time to time, where the drafting or signing of the letter of wishes is on the 'to do list' long after the trust deed has been signed. Whilst it is impossible to force the issue of signing a letter or memorandum, it is always useful and also acceptable for a trustee to keep their own detailed notes from meetings where wishes are expressed generally, and other advisers are also present, in the hope that they are recorded in some way and could be referred to in the future.

By complete contrast, there is the settlor who wields the letter of wishes as a 'power play', so they feel that they retain control somehow over the trust fund. We have seen settlors update their letter of wishes as frequently as several times per year, and who 'summons' their advisers after arguments with...