There are different names for it, but all these documents are similar – the “Letter of Wishes” or the “Memo of Wishes” or the “Statement of Wishes”. They are all used for a Family Trust where the person who set it up, sets out what direction they want the trust to take in the future.
In the past, there was more of a focus on these being about “wishes”, not binding instructions like you have in a will. But more and more, there is a focus on making sure that trustees honour the objectives of the trust. This focus is found in the statute and is also appearing in recent court cases. No longer can trustees so easily do what they want, without closely referring to the relevant Letter of Wishes. If this trend continues, the Letters of Wishes will become more like a will, where there is less choice for the trustees – more of a Letter of Instruction!
The statute says that trusts should be managed according to their objectives, reflecting what the settlor intended. Basically, it's about sticking to the game plan.
Potential Challenges
While this focus on settlor intentions is a step in the right direction, it also brings some challenges. If trustees make decisions without considering what the settlor wanted, they could face pushback. Documenting how they factored in the settlor’s wishes can be tricky, especially when it comes to sharing that information with beneficiaries.
Trustees need to find a balance. They should be transparent about their decisions but also protect themselves from potential criticism. If they stray from the settlor’s wishes, they should be ready to explain why.
How Godfreys Law Can Help
Navigating these complexities can seem overwhelming, but that’s where Godfreys Law comes in. Our experienced team can help you understand the nuances of the Trusts Act and ensure you’re aligning your decisions with settlor intentions. Whether you’re setting up a trust or managing an existing one, we offer tailored advice to help you stay compliant and avoid potential pitfalls.
In the end, the Trusts Act 2019 aims to ensure that trustees act in line with the values and wishes of those who set up the trust. This not only fosters trust but also helps everyone involved feel more secure and understood. With the right guidance, you can navigate these changes with confidence!
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