by Gina Lazarides
What is a Letter of Wishes?
A letter of wishes is a private document that is generally not enforceable and binding in law, which is written supplementary to a will and testament or a trust deed. It provides useful guidance as to the deceased’s wishes to executors, guardians and heirs of an estate, or to the trustees of a trust.
Why write a Letter of Wishes?
A letter of wishes can serve many different purposes, one important purpose being to assist executors, guardians, and heirs of an estate as well as trustees of a trust to understand your intent as to assets or benefits once you are no longer around. A letter of wishes allows a testator to express wishes regarding his/her personal belongings after death, such as jewellery or trinkets, to the people of their choice. The benefits of distributing such belongings of nominal value in a letter of wishes rather than in a will include that in a letter of wishes one can list each item separately, detailing who they would like to receive such an item. If this were to be done in a will it could cause the will to be lengthy and impractical. Using a letter of wishes for this purpose may allow you to change these details more frequently, without having to amend your will. Writing specific details in a letter of wishes often allows a trust deed or will to remain more flexible so that it can provide for changes in circumstances.
When should a Letter of Wishes be signed?
It is best to sign a letter of wishes not long after a trust has been set up in order to steer clear of any controversy around whether the letter of wishes is a true reflection of what the founder’s wishes were for the trust at the time the trust was set up. The letter of wishes should be frequently updated as changes in circumstances occur.
When not to use a Letter of Wishes?
The trustees, executors, heirs, or guardians to whom you address the letter of wishes are under no obligation to give effect to the wishes provided therein. And for this reason, it is not advisable to distribute items with substantial financial or sentimental value using a letter of wishes. Not only may your wishes not be adhered to as intended, but it could also cause conflict and disputes within the family. It is also not recommended to use a letter of wishes to distribute items for which you require absolute certainty as to who the heir will be and the amount/items to be distributed.
Where should a Letter of Wishes be kept?
A letter of wishes should preferably be kept in a safe place alongside your last will and testament. If the letter of wishes is separated from the will, you run the risk of the letter of wishes being lost or misplaced. If that happens, an estate or trust may be administered without your wishes being known or considered.
How should a Letter of Wishes be written?
A letter of wishes should indicate clearly that it is an attestation of your wishes, and that it is not an order or command, using the appropriate wording. It should include details regarding whom the trustees should seek advice from after the founder’s death or his/her possibly mental incapability. The circumstances and occurrences which the trustees may consider making distributions or allocating income/capital gains to minor beneficiaries can be set out in the letter of wishes. Details of your wishes as to the application of trust benefits to “contingent” beneficiaries named in the trust deed (for example beneficiaries to benefit in the event of family obliteration), for consideration by the trustees, can be included in a letter of wishes. Provided that the trust is discretionary, the letter of wishes can also suggest the age at which each beneficiary should receive trust benefits and the percentage split of the trust capital between the ultimate capital beneficiaries of the trust on termination thereof. It is important that the letter of wishes does not conflict with the terms of the trust deed or last will and testament as this could lead to aggrieved beneficiaries or family members attempting to use the letter of wishes “to go after” the trust or estate assets.
Conclusion
If drafted correctly, a letter of wishes can be a great tool to provide guidance regarding your intentions for your legacy when you are not around to communicate this anymore. At Fidelis Vox we specialize in drafting letters of wishes that convey our clients’ intentions clearly and unambiguously. Feel free to contact us at gina@fidelisvox.co.za with any questions regarding letters of wishes or to allow us to help you to draft your letter of wishes.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)