Sometimes called a “statement of intent” or “family values statement,” a letter of wishes can be shared with your beneficiaries to give them insight into your thinking. Or you can arrange for your letter to be seen by the trustee only.
“As a corporate trustee with a global presence, we’ve handled a great many letters of wishes and seen them used in many ways,” says Adam Clark, head of Trusts and Estates at J.P. Morgan Private Bank.
One matriarch used her letter of wishes to convey a philosophy of conservation for future generations. Written about 50 years ago and reread every year at the family’s annual meeting, the letter asked the trust’s beneficiaries to view themselves as stewards of the family fortune and to “take only what you need and pass the rest on.” The letter advised them to draw on trust funds only to help them with their life’s basic building blocks.
The trust officer who handles this trust reports that the annual reading of this letter is always a moving occasion. “This letter of wishes established a tone—setting expectations—and over the years, everybody rose to the occasion. The family took it extremely seriously. The letter of wishes helped create a strong family tradition.”
If you think you might like to write a letter of wishes, says Mr. Clark, we’ve identified five best practices:
1. Have your legal advisors write, or at least review, your letter. This step will help to avoid any unintended consequences.
2. Write your letter with the understanding that it cannot change your original trust document. The original trust document is a legal agreement that will take precedence.
3. Keep in mind that your heirs may see the letter of wishes. Consider how a beneficiary might feel discovering in a letter of wishes that his parents were disappointed with his lifestyle and thought him incapable of handling his finances.
4. Be practical: Consider your trustee’s ability to carry out your wishes. Trustees often do not have enough daily contact to closely monitor behavior. If you feel such oversight may be necessary, speak with your estate-planning attorney about what arrangements might be made.
5. Keep letters simple and up to date. The simpler the language and suggestions, the less likely you may feel compelled to revise or amend your letter of wishes. J.P. Morgan wealth advisors in Asia report that clients typically review and update their letters every two to three years.In the United States, our trust officers find clients tend to update letters of wishes when they are older and revisiting their estate-planning documents. One trust officer says, “People consider it an active part of their plans: Do they have a health proxy? Are their letters of wishes up to date?” With over 200 years of experience, J.P. Morgan has a longstanding history of acting as a fiduciary for our clients and their families. Our Wealth Advisors and Trust Officers are available to work with you and your professional advisors to meet all of your wealth needs. We look forward to helping you with your wishes—for you and your legacy.