What is a letter of wishes and how is it different from the trust deed?

The letter of wishes is a private document the settlor writes to guide the trustee on how to exercise the discretion the deed hands the trustee. It sits outside the deed and is not part of the trust's legal architecture. It does not bind the trustee. The deed defines what the trustee may do; the letter guides how the settlor wants it done. Where the two appear to conflict, the deed prevails.

Does the trustee have to follow the letter of wishes?

The trustee must consider it. That means the letter is a compulsory input to the trustee's decisions on discretionary matters. But the trustee cannot fetter its discretion by following the letter mechanically. A trustee that ignores the letter has failed to consider a relevant matter. A trustee that follows the letter without regard to the current facts and beneficiaries has not exercised discretion at all.

What typically goes in a letter of wishes?

Content is heavily fact-driven. Themes commonly seen include the settlor's purpose in setting up the trust, principles for distribution decisions, factors the trustee should weigh, protective triggers such as addiction or matrimonial risk, guidance on younger beneficiaries, investment philosophy, and views on special assets held by the trust. This is not the required list; it is the commonly-seen list.

Is the letter of wishes confidential?

It is presumptively confidential to the trustee. But confidentiality is not absolute. Courts have supervisory jurisdiction over trusts and may in appropriate circumstances direct that parts of the letter be shown to a beneficiary or produced in litigation involving a beneficiary. Language purporting to make the letter absolutely confidential does not bind the court. Settlors should write letters with the discipline that the letter may later be read by people it was not addressed to.

The letter of wishes: guidance, not law

The letter of wishes is a document the settlor writes to guide the trustee. It sits outside the trust deed, is not part of the trust's legal architecture, and does not bind the trustee. But where the deed hands the trustee discretion, the letter is where the trustee looks for the settlor's view on how that discretion should be exercised. Written well, it lets the settlor's voice travel forward with the trust for as long as the trust runs. Written badly, or left to grow stale, it can become evidence against the family in later disputes.

What the letter is, and what it is not

The letter is a private, non-testamentary document by which the settlor gives the trustee guidance on the discretion the deed hands the trustee. It is typically written by the settlor with practitioner support, held with the trust records, and treated as a document of practice rather than law. No jurisdiction requires it by statute. It is the settlor's voice on paper, addressed to the trustee, for a time after the settlor is not there to speak. It is not a set of instructions the trustee must follow.

What the deed does and what the letter does

The deed defines the trustee's powers: who can benefit, what the trustee may do with the assets, whether beneficiaries can be added or removed, and what role the protector has. Those are decisions the deed makes and the trustee inherits.

The letter does not extend the trustee's powers, create new beneficiaries, or add rights the deed did not give. It guides the trustee in exercising the discretion the deed provides. Where the deed permits distributions to any beneficiary, the letter records the settlor's view that distributions should be for education, welfare and a first-property purchase, staged and structured in a particular way. Where the deed permits the trustee to add beneficiaries, the letter records the settlor's view on when and to whom. Where the deed and the letter appear to conflict, the deed prevails.

The trustee must consider it, and must not treat it as binding

This is the point that catches most readers by surprise. A well-established position across mature trust jurisdictions is that a letter of wishes is a matter the trustee must take into account when exercising discretion. Ignoring it entirely is a failure to consider a relevant matter. But it is also established that the trustee cannot fetter its discretion by binding itself to follow the letter mechanically. A trustee who mechanically implements a letter without considering the current facts, the current beneficiaries and the current circumstances is not exercising discretion; it is executing an instruction, and that is a breach of the trustee's duty.

The letter is a compulsory input to the trustee's judgment, not a compulsory output. The trustee reads it, weighs it against the current facts, and decides. Maintained properly, it is also the trustee's best evidence, in the event of a later challenge, that the settlor's view was considered when discretion was exercised.

The same character attaches to any expression of the settlor's wishes, whether written into the letter, communicated in conversation, or noted separately. The settlor's voice, alive or not, is a wish, not a command. If it were a command, the trust would not be a discretionary trust; it would be an agency for the settlor.

What typically goes in

The letter's content is heavily fact-driven, but a small set of themes shows up in most well-drafted letters. This is not the required list; it is the commonly-seen list.

The settlor's purpose in setting up the trust. Why the settlor set the trust up. What the wealth is meant to serve.

Distribution principles. How the settlor wants the trustee to weigh distribution against accumulation, capital against income, and different beneficiaries at different stages.

Factors the trustee should weigh. Education, welfare, health, first property, business support, and protection from waste or from claims of a matrimonial nature.

Protective triggers. Circumstances in which the settlor wants the trustee to be more cautious: beneficiary addiction, insolvency, matrimonial breakdown, or other risks the settlor foresees.

Younger beneficiaries. Guidance on beneficiaries not yet adults, or who have not yet demonstrated capacity to manage significant wealth.

Investment philosophy. The settlor's view on how the trust's wealth should be invested and what risk posture is appropriate.

Special assets. Where the trust holds a family business, a family home, a collection or an operating asset, the settlor's view on how those specific assets should be treated.

When the letter is not needed

A letter has content only where the trustee has discretion to guide. Trusts that carry little or no discretion (bare or nominee trusts, fixed-interest trusts, trusts where the distributions are prescribed) do not need one. Even inside discretionary trusts, some families conclude at outset that the deed is prescriptive enough that the letter does not need to add much. This is a design choice.

Common failure modes

Instructional verbs. "The trustee must" and "the trustee shall" invite the argument that the letter is trying to fetter the trustee's discretion. Guidance-verbs are safer: "the settlor wishes", "the settlor hopes", "the settlor's view is".

Over-vague. A letter that gestures at values without giving the trustee anything specific to weigh leaves the discretion effectively unguided. "The trustee should do what is right for the family" is not guidance; it is a hope.

Contradicting the deed. The deed prevails. A letter that says something the deed does not permit is disregarded, and worse, becomes evidence in later disputes that the settlor's expectations diverged from the trust as drafted.

Staleness. A letter written at settlement and never touched grows out of date. The beneficiaries change, the family develops, the settlor's views mature.

Ambiguous supersession. Where a settlor writes several letters over time, each must make clear which is current. Multiple live letters that the trustee has to reconcile are a source of dispute rather than guidance.

Drafted by adviser without the settlor's voice. A letter that reflects the adviser's view rather than the settlor's is less persuasive and can be attacked as not representing the settlor's actual wishes.

Sensitive judgements about beneficiaries. A letter that expresses strong views about individual beneficiaries can become a litigation exhibit later. Settlors write letters with the discipline that the letter may be read by people it was not addressed to.

Confidentiality

The letter is a private communication from the settlor to the trustee, and its default position across mature trust jurisdictions is confidential to the trustee. But confidentiality is not absolute. Courts have supervisory jurisdiction over trusts and may in appropriate circumstances direct that parts of the letter be shown to a beneficiary or produced in matrimonial or family litigation. Language purporting to make the letter absolutely confidential does not bind the court. The practical implication is that the settlor should not write anything the settlor would be seriously troubled to have later read by a beneficiary or a court.

Updating

The letter should be reviewed and updated as the family, the assets or the settlor's views change. Life events (marriage, divorce, birth, death, incapacity), asset events (business exit, major asset acquisition or sale), and material shifts in the settlor's thinking are the natural triggers. There is no fixed calendar for review; the review is triggered by change, not by a date. Where a letter is updated, the new letter should make clear that it supersedes any earlier letter, so the trustee is left with one live document rather than an archive to reconcile.

The letter and the deed, together

The letter is guidance the settlor writes for the trustee, held privately outside the deed, and read by the trustee as the primary reference for the settlor's view on how discretion under the deed should be exercised. It does not bind, and the deed prevails over anything it says. Written well, it carries the settlor's voice forward. Written badly, it becomes evidence in later disputes that the settlor's expectations diverged from the trust as drafted.

For any family with a trust, or considering one, the first question is whether the trust is the right instrument at all. If it is not, no letter is needed. Where it is, the deed defines what the trustee may do and the letter guides how the settlor wants it done. Between them, they carry the settlor's intention across the horizon the trust was built for.

The letter of wishes.Guidance, not law.