What is a letter of wishes?
A letter of wishes is a private document which sits alongside a will. It is not legally binding upon the executors and trustees but it serves as useful guidance in the future to assist executors and trustees in reaching pragmatic decisions and, in the majority of cases, tends to be followed by the executors and trustees to the letter. A letter of wishes can be updated and replaced at any time without the requirement of formally updating the will to which it relates.
A letter of wishes in relation to a will can include guidance in relation to funeral instructions, identify specific items which are given away under the will, provide explanations as to why someone might have been excluded from your will or give guidance in relation to who should be notified of your death.
Most often, a letter of wishes is used with reference to trust provisions in the will and provides guidance to the executors and trustees in relation to the discretionary powers they have. For example, the will may include provisions setting up a discretionary trust with a wide range of potential beneficiaries. While the letter of wishes must not interfere with the discretion of the executors and trustees appointed, it can give detailed guidance about which of the potential beneficiaries might benefit from the trust and when, to what extent (in terms of value or proportions and whether that might be income or capital) and how the executors and trustees might make decisions in relation to requests from potential beneficiaries. It might also set out specific circumstances under which the executors and trustees would consider making distributions at a stage earlier than indicated.
Letters of wishes can also provide guidance to guardians appointed under the will in relation to how you would like your children to be raised, where they might live and the like.
A letter of wishes is written in plain English to include an express declaration that the wishes do not bind the executors and trustees. It should be signed and dated and held with the will to which it relates. It need not be witnessed. Unlike a will, as it is not a testamentary writing, it does not become a publically registered document on your death. Careful drafting is required in order to avoid the letter of wishes inadvertently becoming a testamentary writing (and therefore requiring to be publically registered on your death) and so DIY letters of wishes are not recommended.
Do I need a letter of wishes?
If you have a will under which there are discretionary trust provisions, a letter of wishes is very important. Where there may be competing interests of a surviving spouse and children and remoter generations it gives the executors and trustees a reference point in terms of your wishes during your lifetime. It may also be helpful in demonstrating to beneficiaries or potential beneficiaries why, for example, someone is being treated differently or receiving more than another beneficiary – requiring more or less funds to support them or having special medical or other needs.
A letter of wishes may become particularly important where a second marriage is involved and, perhaps especially, where there are children from different relationships where, without this guidance, the executors and trustees might find it more challenging to make decisions.
Letters of wishes can be changed multiple times when the underlying will remains the same, meaning that your wishes can be recorded as and when they change in line with changing family and other circumstances.
This note is intended to be a brief summary. No responsibility can be accepted for any action taken in reliance of this note and specialist legal advice is recommended in every case. Turcan Connell would be happy to provide such advice.
For more information on letters of wishes or wills in general, please contact us on 0131 228 8111 or through the website.