A letter of wishes is a non-binding indication given by the Settlor (or beneficiary) of a Trust setting out the manner in which he or she wishes the trustees to exercise their discretion in relation to a Discretionary Trust. It also enables the Settlor of the Trust to share personal thoughts and perspectives with those who will be serving over the years as trustees.
Letters of wishes are useful where the Trust Deed gives the Trustee/s very broad powers and discretions.
The letter of wishes principally sets out the manner in which the settlor wishes the trustees to exercise their powers and discretions, but is not binding on the trustees. (All binding requirements must be contained in the Trust Deed itself).