So, what is a letter of wishes? It is a private document, separate from the trust deed, in which the settlor explains to the trustee what the trust is for and how they would like the trustee's discretion to be exercised. It guides the trustee; it does not give orders. The trustee reads it, weighs it and keeps the final decision, because the powers belong to the trustee under the deed.
For anyone choosing or reviewing a trustee in Switzerland, the letter is one of the clearest signs of how a relationship works in practice: who keeps it up to date, who actually reads it, and what happens to it when the family changes. The glossary below defines the letter itself and the neighbouring terms, in alphabetical order. For the working side, see how a trustee uses and updates letters of wishes.
A
Amendment of a letter of wishes
A letter of wishes can usually be replaced or supplemented at any time by the person who wrote it, without touching the trust deed. The newest dated version is normally the one a trustee relies on, so older versions should be kept on file and clearly marked as superseded.
Annual review
Many trustees ask the settlor, once a year, whether the letter still reflects the family's situation. The review is a good moment to record births, deaths, separations or a change of residence. See the annual trust health check.
B
Beneficiaries
The people or classes of people who may receive benefits from the trust. A letter of wishes often explains how the settlor sees each of them: who should be supported first, and for which purposes such as education or housing.
Binding effect
A letter of wishes is generally not legally binding on a trustee. The trustee must still take it into account in good faith, and a trustee who ignores it without reason may have difficulty explaining that choice later. Whether a particular document has any stronger effect depends on its wording and on the governing law of the trust.
C
Class of beneficiaries
A group described by relationship rather than by name, for example "my grandchildren". A letter of wishes helps the trustee understand how the class should be treated, for instance whether later-born members share equally.
Conflict with the trust deed
If the letter says one thing and the deed another, the deed prevails. A trustee will normally flag the inconsistency and ask the settlor to resolve it, rather than quietly choose a side.
D
Dating and signing
A letter should be dated, signed and handed to the trustee, who records its receipt. Without a date, nobody can tell which of several versions is the latest.
Discretion
The freedom the deed gives the trustee to decide whether, when and to whom to make distributions. The letter of wishes is the main tool for informing that freedom without removing it.
Discretionary trust
A trust where the trustee chooses among beneficiaries rather than following fixed entitlements. It is the structure in which a letter of wishes matters most. See the trustee of a discretionary trust.
E
Exculpation clause
A deed provision limiting a trustee's liability in defined circumstances. It affects how far a trustee can be held responsible for decisions taken while weighing the letter. Such clauses have limits and depend on the governing law. See exculpation clause.
F
Fiduciary duty
The duty of loyalty and care a trustee owes to the beneficiaries. Reading the letter of wishes carefully is part of acting properly, but the duty is to the beneficiaries as a whole, not to the letter. See what a trustee owes the beneficiaries.
FINMA
The Swiss Financial Market Supervisory Authority. Professional trustees in Switzerland need its authorisation, and day-to-day supervision is carried out by a supervisory organisation that FINMA itself authorises and oversees.
G
Governing law
The law chosen to govern the trust. It determines how a letter of wishes is treated, including how far a court would expect the trustee to follow it.
H
Hague Trusts Convention
The 1985 Hague Convention on the Law Applicable to Trusts and on their Recognition. Swiss legislation refers to it when it defines a trustee's activity.
I
Information rights
What beneficiaries may see depends on the deed and the applicable law. Whether a letter of wishes can be disclosed is a common question, and trustees often keep it confidential. See information your trustee must give you.
Irrevocable trust
A trust the settlor cannot simply undo. Because the settlor has given up control, the letter of wishes becomes the main channel through which they can still express views.
L
Legal capacity
A letter of wishes should be written when the settlor can understand and explain their intentions. A trustee may ask for evidence of capacity if a late change looks unusual.
Letter of wishes
A non-binding written statement by the settlor, addressed to the trustee, explaining goals and preferences for the trust: how to treat beneficiaries, what to do with certain assets, and how to deal with changing circumstances. It supplements the trust deed and does not replace it.
Living document
A good letter is revisited as the family changes. A letter written once and never reviewed may describe children as minors long after they have become adults.
M
Memorandum of wishes
Another name for a letter of wishes, used by some trustees and advisers. The purpose is the same.
P
Protector
A person with oversight powers over the trustee, such as approving distributions or replacing the trustee. A protector may read the letter alongside the trustee, which can help when interpretation is disputed. See protector.
R
Reserved powers
Powers the settlor keeps for themselves under the deed. They are different from a letter of wishes: a reserved power is a legal right, while the letter is a request. Mixing them up can weaken the trust. See reserved powers.
Revocable trust
A trust the settlor can revoke. Here the settlor has direct control, so a letter of wishes is often less central than in an irrevocable structure.
S
Settlor
The person who creates the trust and usually writes the letter. See settlor.
Successor trustee
The person or company named to take over if the trustee can no longer act. The letter of wishes should be handed over with the rest of the file so that the successor does not start without knowing the settlor's intentions. See successor trustee.
Supervisory organisation
A body authorised by FINMA to check, on a continuing basis, that professional trustees meet the conditions of their authorisation. SO-FIT is one such organisation.
T
Trust deed
The binding document that creates the trust and sets out the trustee's powers. The letter of wishes sits beside it and cannot enlarge or reduce those powers.
Trustee
Under Swiss financial-institutions law, anyone who professionally manages separate assets, or disposes of them, for a beneficiary or a defined purpose on the basis of a trust deed within the meaning of the 1985 Hague Convention is a trustee. Professional trustees are supervised by FINMA.
Trustee minutes
The record of the trustee's decisions. Good minutes show that the letter of wishes was considered and explain why the trustee followed it or went another way. Missing minutes are a frequent finding in reviews; see a case where a review revealed missing minutes.
V
Vulnerable beneficiary
A beneficiary who may need extra protection, for example because of illness or difficulty managing money. A letter of wishes can explain how the settlor would like such a person supported, for example by paying providers directly. See trustee care for vulnerable beneficiaries.
W
Wishes versus instructions
The most important distinction. "I would like you to support my grandchildren's studies" is a wish. "You must pay each grandchild on their birthday" is an instruction, and if it appears only in the letter, the trustee is not bound by it. Drafting to keep the two apart avoids later disputes.
Example of wording
Example: a family established in Lausanne writes that the settlor hopes the trustee will favour education and a first home, will treat children from both marriages fairly, and will talk to the eldest daughter before any large decision. None of this limits the trustee's powers. It shows the trustee how the settlor thinks. For family situations of this kind, see blended family and trustee neutrality.
Will
A will deals with assets at death and follows formal rules. A letter of wishes belongs to the trust and has no equivalent formal status.
Frequently asked questions
What is a letter of wishes in a trust?
It is a non-binding document in which the settlor tells the trustee what they hope the trust will achieve and how they would like discretion to be used. The trustee reads it, takes it into account and remains responsible for the decision.
Is a trustee obliged to follow a letter of wishes?
Not in the way it must follow the trust deed. The trustee must consider it seriously and in good faith, and should be able to explain a departure. The exact weight depends on the deed and the governing law, so a specific case needs individual analysis.
Who keeps the letter of wishes?
The trustee normally holds the signed original in the trust file, and the settlor keeps a copy. If the trustee changes, the letter should be part of the handover file. See changing trustee step by step.
Can beneficiaries see it?
Sometimes. It depends on the deed, the governing law and the trustee's assessment. Many settlors prefer confidentiality, and a trustee will usually ask about this when the letter is received. For family conflict about access, see adult children asking for accounts.
Sources
Considering a trust, or reviewing one?
Describe your situation in a few lines. A Geneva-based trustee reviews it in confidence and replies in writing.