A Memorandum of Wishes (sometimes referred to as a Letter of Wishes) is a document in which the people who create a trust set out how they want the trust to be run during their lifetimes, and also what they want to happen with the trust after they die.
Many people ask why they need a Memorandum of Wishes if they already have a Will in place. This is a good question. However, a Will generally deals with all your property in your personal name, whereas a Memorandum of Wishes deals with your trust property.
Without a Memorandum of Wishes in place, the trustees who are left after you pass away have no clear guidance on how you want the trust managed.
A Memorandum of Wishes lets you make a clear statement of your intentions for setting up the trust.
You can also provide clear guidance on how you want the trust managed after your death, and you can include the following things in the document:
- Specific instructions, like for example you might want one particular child of yours to be able to live in a specific property owned by the trust for a certain time after your death;
- Guidance on trust asset management;
- How you want the Trust’s income and capital to be used;
- Guidance on how the Trustees should use their discretionary powers; and
- How to deal with Beneficiaries and any special circumstances – special needs children for example, tertiary education, funding for school or travel etc.
Also, just like with a Will, it is always a good idea to update your Memorandum of Wishes on a regular basis when and if your circumstances change.
If you wish to create a Memorandum of Wishes or need any advice regarding family trusts please contact us.