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What is a Letter of Wishes?
Letters of wishes specify what a settlor wishes the trustee to do about particular matters that arise during the trust period. For example, which of the beneficiaries should receive a distribution from the trust assets, when such distribution should be made and how much such distribution should be.
E.g. I want to give my mom 70% and my sister 30% of my trust assets.
Why do I need a letter of wishes?
Where there is any element of discretion it is important that your trustees know your intentions behind the structure of your trust. They need to know your main aims and how you would like them to look after your assets.
Can a Letter of Wishes be Updated?
Yes. Settlors can make changes to trust arrangements from time to time with relative ease without having to go through the formalities of amending a trust deed.
Is a Letter of Wishes Legally Binding on the Trustee? How Does it Work?
It's not a legal obligation for a trustee to follow the letter of wishes. The trustee, however, has to take into account the letter of wishes when exercising its powers, and the trustee can follow the letter of wishes if it's in line with the trustee's duties. Most of the time, trustees will follow the letter of wishes.
Why Is it Not Possible for a Letter of Wishes to Bind the Trustee?
According to Hong Kong Law, trustees must apply their minds when exercising their power or discretion, but not act under the instruction of another. To do so is a breach of trust.
- A Letter of Wishes is an important and confidential document and trustees would usually recommend settlors write one when setting up a trust
- A Letter of Wishes can be updated anytime and the contents of which shall be reviewed on a regular basis
- A Letter of Wishes is not a binding on the trustees, it often accompanies a discretionary trust as a guide to the trustee.
意願書的意義
委託人與信託機構會共同制定信託契約，當中的條款及細則訂明信託資產會由信託機構持有，信託機構會參照信託契約及成立人訂下的宗旨和意願 （ “意願書”），妥善地管理及分配有關信託資產給委託人指定的受益人。
意願書表達了委託人的願望，以書面形式說明他／她希望受託人如何指定受益人運用受託資產。通過意願書，列明信託受益人是誰，受益人的分配比例，及其投資方向。例如，受託人通常會參考其意願，並有酌情權處理分配情況。例如通脤高，受益人要求多一點生活費，受託人可選擇向受益人提供增加分配生活費用。意願書只作參考，並沒有法律責任需要受託人根據其意願去管理資產。意願書可以不時更新信託安排，而無需修改信託契約所需的程序手續。
受託人參照委託人的意願管理及分配信託資產，這樣可以避免家庭成員之間的糾紛，保護委託人的財產免受可能不擅長資金管理的家人胡亂揮霍。
