Have you written a Letter of Wishes?

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If you have set up a trust, have you written a letter of wishes?

As part of our ongoing review process, if a client has set up a trust, then we check if they have a letter of wishes in place and if it is up to date. There is a similar document for pensions usually known as an expression of wishes.

A letter of wishes is a way for the settlor of a trust to inform the trustees of what you would like them to consider when they are exercising any discretionary powers, such as who you would like to benefit from the trust funds. You can write it yourself or you can ask a solicitor to help if you need to.

A letter of wishes is not legally binding on the trustees (otherwise they wouldn't have 'discretion'), but may be considered by them.

Usually, the letter of wishes covers who the settlor would like the trust funds to go to. But they can also include how you would like the funds to be invested.

As noted above, the letter of wishes should be regularly reviewed to make sure that it is still in line with your wishes as the settlor. It should be kept by the trustees.

We are always happy to provide some guidance and examples to our clients to help with this if required.

- Charlie Rigg, FMB Chartered Financial Planner

Please note that The Financial Conduct Authority does not regulate tax and trust advice.

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