Letter of Wishes

Also known as Memorandum of Wishes or Side Letter.

A document prepared by the grantor or settlor of a trust providing guidance on how trustees should exercise their discretions. Letters of wishes are generally used by the beneficial owner of the trust assets to retain some control over the trust assets. It is a separate document and not a part of the trust instrument.

A letters of wishes enables the trustees to exercise their discretion having in mind the wishes of the grantor. They may consider the letter but are not bound or otherwise accountable by its terms. Although a letter of wishes is frequently associated with abusive trusts, both offshore and domestic, it is also used as a part of normal estate planning and in other contexts for legitimate purposes.