The question of whether you can, and should, write a letter of wishes alongside your trust is a common one for individuals planning their estate with a San Diego trust attorney like Ted Cook. The answer is a resounding yes – in fact, it’s a highly recommended practice. While a trust document itself lays out the legal framework for asset distribution, a letter of wishes provides a space for more personal guidance, nuance, and context that wouldn’t typically be included in the formal legal language. Approximately 70% of comprehensive estate plans now incorporate a letter of wishes, reflecting a growing desire for flexibility and personalized instruction alongside rigid legal directives. This isn’t a legally binding document, but rather a guide for your trustee to help them understand your intentions and make informed decisions.
What is the purpose of a letter of wishes?
The primary purpose of a letter of wishes is to communicate your hopes and desires regarding the management and distribution of trust assets beyond the strict terms of the trust. It allows you to explain the *why* behind your decisions, offering valuable insight to your trustee. For example, you might specify that you want certain family heirlooms to go to a particular niece, not because of their monetary value, but because of their sentimental significance and her appreciation for antiques. You can also address scenarios not explicitly covered in the trust, like providing guidance on educational expenses or charitable donations. It allows for the expression of values; a client once told me they wanted their grandchildren to understand the importance of hard work and self-reliance, and requested the trustee structure distributions to encourage those values. A letter of wishes is particularly useful when dealing with complex family dynamics or unique asset distributions.
Is a letter of wishes legally binding?
No, a letter of wishes is *not* legally binding. This is a crucial distinction. Unlike the trust document itself, which is enforceable in court, a letter of wishes is simply an expression of your preferences. Your trustee is expected to consider it seriously, but ultimately has the discretion to deviate from it if they believe doing so is in the best interests of the beneficiaries or if circumstances have changed significantly. Think of it as a moral obligation, rather than a legal one. This flexibility is often seen as a benefit, allowing the trustee to adapt to unforeseen circumstances, but it also means the letter’s content isn’t guaranteed to be followed exactly. Ted Cook often emphasizes this distinction to clients, highlighting the importance of clearly defining core directives in the trust document itself while using the letter for softer guidance.
What should I include in my letter of wishes?
The content of your letter of wishes is entirely up to you, but common inclusions are details about specific assets, explanations of your reasoning behind distributions, and guidance on how you’d like your trustee to handle discretionary powers. You might include information about your beneficiaries’ personalities, needs, and values, helping the trustee tailor distributions accordingly. You could also outline your philanthropic goals, indicating preferred charities or causes. Many clients also use the letter to express their overall vision for their family’s future and the impact they want their wealth to have. Ted Cook recommends including specific examples to illustrate your intentions, making your guidance as clear and actionable as possible. I recall a situation where a client meticulously described their desire for their grandchildren to receive funding for educational pursuits aligned with their passions, rather than simply covering tuition costs; this level of detail proved invaluable to the trustee.
Can I update my letter of wishes?
Yes, absolutely. Unlike a trust document, which requires formal amendment, a letter of wishes can be updated as often as you like. This is one of its key advantages – it allows you to communicate changing priorities and preferences without the cost and complexity of amending a legal document. Ted Cook advises clients to review their letter of wishes every few years, or whenever a significant life event occurs, such as a birth, marriage, divorce, or financial windfall. It’s important to date each version of the letter and clearly indicate that it supersedes any previous versions. Keeping the letter with your other estate planning documents ensures easy access for your trustee when needed. It’s also a good practice to inform your trustee of any major updates.
What happens if my letter of wishes conflicts with my trust?
In the event of a conflict between your letter of wishes and your trust document, the trust document will always take precedence. The trust is the legally binding contract, and the letter of wishes is merely an expression of your preferences. Your trustee is obligated to follow the terms of the trust, even if they disagree with the guidance in your letter of wishes. However, the letter can still provide valuable context and explain *why* you made certain decisions in the trust, which may help the trustee interpret the terms more effectively. Ted Cook stresses to clients that the letter shouldn’t be used to contradict the trust, but rather to supplement and clarify it. It’s like a road map that offers suggestions, but the legal contract dictates the route.
A story of misunderstanding without a Letter of Wishes
Old Man Hemlock, a wealthy but reserved San Diegan, created a trust leaving a substantial sum to his niece, Clara, but with limited guidance on how it should be used. He intended the money to fund her lifelong passion for marine biology, but he didn’t explicitly state that in the trust. Clara, overwhelmed by the inheritance and struggling with personal debt, used a large portion of the funds to pay off her creditors, effectively squashing her dream. The trustee, bound by the trust’s terms, had no grounds to intervene, as the funds were distributed legally. The Hemlock family was left heartbroken, realizing a simple explanation of his wishes could have changed everything. It was a painful lesson in the importance of clear communication, beyond the legal jargon.
How a Letter of Wishes saved the day
The Miller family faced a similar situation, but with a different outcome. Mr. Miller created a trust leaving a significant portion of his estate to his grandchildren for their education. However, he also included a detailed letter of wishes expressing his strong desire that the funds be used to support their pursuits in the arts – a passion he shared and wanted to foster in the next generation. One granddaughter, Sarah, initially planned to use the funds for a more “practical” degree in business, believing it would lead to a more stable career. However, upon reading her grandfather’s letter of wishes, she was deeply moved by his heartfelt expression of support for her artistic talents. She ultimately decided to pursue her dream of becoming a painter, and her family proudly supported her decision, knowing it aligned with her grandfather’s wishes. The letter of wishes had not only guided the trustee but also inspired a granddaughter to embrace her true calling.
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