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A letter of wishes is a private document in which the settlor explains to the trustee how they hope the trust will be run. If you are searching for how a letter of wishes trustee relationship works in practice, the short answer is this: the trustee reads the letter carefully, treats it as important guidance, and still decides for themselves. Because the letter is only as useful as it is current, the real work lies in keeping it aligned with your family.
What a letter of wishes is, and what it is not
The trust deed is the binding document. It sets out the trustee's powers, the class of beneficiaries and the limits on what can be done. The letter sits beside it and carries your reasoning: why you want one child supported through education, how you feel about a business being sold, what you would want if a beneficiary struggled with money.
Under the Hague Convention on trusts, which Switzerland has applied since 1 July 2007, the trustee holds the assets as a separate fund and must manage them and account for them. Article 2 also confirms that powers reserved by the settlor do not stop a trust from existing. A letter of wishes is not a reserved power. It is a non-binding statement, which is exactly why a trustee can follow it closely without being its servant.
If you want to understand the settlor's own toolbox, see settlor reserved powers and the trustee and the glossary entry on letters of wishes.
How a trustee weighs the letter
A trustee in a discretionary structure has a duty to consider each decision on its merits. The letter feeds that decision, but it does not replace it. In practice a trustee asks several questions:
- Is the letter recent enough to reflect the family as it stands?
- Does the wish fit within the powers in the trust deed?
- Is the wish consistent with the interests of all beneficiaries, including those the letter did not foresee?
- Would following it expose the trust to a legal, regulatory or tax difficulty?
- Has anything happened since the letter was signed that the settlor could not have anticipated?
A recent, clear and reasoned letter carries real weight. An old or vague letter carries less, and a trustee who follows it mechanically may be failing in their own duty. For more on that duty, read what a trustee owes the beneficiaries.
| Situation | Likely weight | What the trustee usually does |
|---|---|---|
| Recent, specific, consistent with the deed | High | Follows it and records why |
| Old, but circumstances unchanged | Moderate | Follows it, may ask the settlor to confirm |
| Old, and circumstances clearly changed | Low | Seeks an update before deciding |
| Wish conflicts with the deed or the law | None for that part | Declines that part and explains |
From letter to trustee decision
The path from a written wish to an actual distribution is more structured than many settlors assume. A professional trustee keeps a record at each step, which is also what a later review will look for.
When a letter no longer fits
The usual entry point is not a crisis. It is a quiet realisation that the letter describes a family that has changed. The events that most often trigger a revision include:
- a divorce, remarriage or the arrival of step-children;
- the sale of a family business, or a new venture;
- a beneficiary's illness, dependency or difficulty with money;
- a move to another country, which can alter the settlor's priorities;
- a death among the people the letter names.
Example (fictional): a settlor living in Lausanne signed a letter some years ago asking the trustee to favour her husband's needs and to keep the family home for the couple. After the divorce, the letter still read as though the marriage were intact. The trustee, noticing the mismatch at the yearly review, did not apply the old wording. It asked the settlor to restate her wishes: who should be supported, in what order, and what she wanted for the home. The new letter replaced the old one, the old one was kept on file as history, and the next distribution decision cited only the new letter.
The point of the example is that the trustee did not need to guess. A letter that is updated at the right moment removes the guesswork, and with it much of the room for later disagreement between beneficiaries.
What the service covers
The service on this page helps you prepare and maintain a letter of wishes that your trustee can actually use. It is aimed at settlors, and at advisers acting for them, who want the letter to match the deed and the real family. Typically it covers:
- hopes on the timing and recipients of distributions;
- the order of priority among beneficiaries;
- your investment attitude and appetite for risk;
- views on education and family values;
- guidance for events such as divorce or dependency.
The work usually starts by reading the trust deed and the existing letter side by side, so that nothing in the letter asks the trustee to do what the deed forbids. It then moves to a conversation about what has changed, a draft, and a review of how the trustee will record and apply it. Related topics include working with a protector and trustee support for family meetings.
What the service does not do
It does not turn a wish into a binding order, and it does not replace legal advice on your particular facts. It does not compare jurisdictions or give tax advice, since the answers depend on where you and your beneficiaries live and on the nature of the assets. The letter also cannot cure a defect in the trust deed; if the deed itself is the problem, an independent review of the trust is the better starting point.
A confidential assessment can establish whether your current letter is still consistent with the deed, whether it is clear enough for a trustee to act on, and whether the way your trustee records and applies it is sound. Any fees depend on the structure and are indicated after that assessment.
Frequently asked questions
Is a letter of wishes legally binding on the trustee?
No. It is guidance, not an instruction. The trustee must act within the trust deed and in the interests of the beneficiaries, and the letter helps them understand your intentions. A trustee who ignores it without reason may be asked to explain; one who follows it blindly against the deed or the interests of beneficiaries may be at fault.
Can I change my letter of wishes whenever I want?
Generally yes, because it is a non-binding document and you are free to replace it. Practically, you should sign and date each new version, tell the trustee, and ask that it be filed with a note that it supersedes the earlier one. If you have reserved powers or a protector, check whether the deed asks for anything further.
How often should the letter be reviewed?
There is no fixed interval in this guidance. A sensible habit is to look at it at each yearly compliance review and after any major family or business event. The annual trust health check includes this as a natural step.
Will beneficiaries see the letter?
It depends on the trust deed, the law governing the trust and the circumstances. Some letters are shared with beneficiaries, others are kept confidential, and a court can sometimes order disclosure in a dispute. Write it on the basis that it may one day be read by someone other than the trustee, and avoid language you would not want a beneficiary to see.
What if the trustee does not follow my letter?
The trustee may have good reasons: the wish may exceed their powers, the facts may have changed, or another beneficiary's interests may weigh against it. Ask for the reasons in writing. If the relationship is under strain, see a dispute between beneficiaries and the trustee.
Do I need a new letter if I change trustee?
It is wise to provide one. A new trustee reads the old letter without the history behind it, so a fresh, dated letter avoids misreading. Hand over the earlier versions as well, since they show how your thinking developed. The handover file from the outgoing trustee is a good place to check this.
Sources
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