Letters of wishes and trustee discretion
Letters of wishes may give guidance to trustees, and those letters have limits.
What a letter of wishes does
A letter of wishes records a settlor's thoughts about how the trust is to be administered or how trustees might use their powers. It is a separate document that provides trustees with nonbinding guidance about the settlor's intentions.[2][4]
A letter of wishes is distinct from the trust instrument and cannot replace or supersede trust and estate documents. It may convey priorities or beneficiary circumstances that trustees can weigh when exercising powers.[1][4][5]
Letters of wishes can be updated to inform trustees about changes in beneficiaries' circumstances that may be relevant to their decisions.[3][4]
How discretionary powers work
A discretionary trust gives trustees authority to decide matters such as administration and distributions, within the trust's terms. Trustees of Cayman trusts have wide powers over assets and distributions. Distribution discretion may cover the manner and timing of payments and can be subject to protector consent or other restrictions.[8][11]
Discretion does not mean that a trustee treats every possible factor as relevant. Trustees are to consider relevant matters when exercising discretionary powers. A settlor's wishes may be important to that deliberation, while remaining one consideration among others.[12]
How the letter relates to trustee discretion
A letter of wishes can inform how trustees understand the settlor's intentions and can supply matters for them to weigh when using discretionary powers. It provides helpful guidance but does not bind trustees or require them to follow its instructions.[3][4]
Delaware law states that a letter of wishes does not bind a trustee or other fiduciary under the governing instrument, and that there is no duty to follow it. Under that provision, following or not following the letter does not itself create an inference that the fiduciary improperly exercised a power or abused discretion.[1]
The letter provides context for trustee decisions. The trustee's discretion remains governed by the trust instrument and applicable rules, while relevant information in a letter may enter the trustee's consideration.[4][5]
Questions and answers
Is a letter of wishes binding on trustees?
Letters of wishes provide nonbinding guidance. Delaware law states that a trustee has no duty to follow one under the governing instrument.[1][2]
What can a letter of wishes communicate?
It can express the settlor's intentions for creating or administering a trust. It can also convey relevant considerations for trustees to weigh when exercising their powers.[4]
Does a letter replace the trust instrument?
No. A letter is not itself a governing instrument and cannot replace or supersede trust and estate documents.[1][5]
Related pages
Sources and data notes
- delcode.delaware.gov, Delaware Code Online. https://delcode.delaware.gov/title12/c033/. Retrieved .
- mannmadegroup.com, Isle of Man trusts: frequently asked questions. https://www.mannmadegroup.com/wp-content/uploads/2020/05/IOM-Trust-FAQ.pdf. Retrieved .
- ogier.com, Back to basics: getting the fundamentals right in Cayman trusts | Ogier. https://www.ogier.com/news-and-insights/insights/back-to-basics-getting-the-fundamentals-right-in-cayman-trusts/. Retrieved .
- charlesrussellspeechlys.com, Trusts and Dynastic Planning: Letters of Wishes and the Limits of Trust Flexibility. https://www.charlesrussellspeechlys.com/en/insights/expert-insights/private-wealth/2025/trusts-and-dynastic-planning-letters-of-wishes-and-the-limits-of-trust-flexibility/. Retrieved .
- bessemertrust.com, Sharing Your Vision and Values: Exploring Letters of Wishes | Bessemer Trust. https://www.bessemertrust.com/insights/sharing-your-vision-and-values-exploring-letters-of-wishes. Retrieved .
- jerseylaw.je, Trusts (Jersey) Law 1984. https://www.jerseylaw.je/laws/current/l_11_1984. Retrieved .
- oecd.org, Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes. https://www.oecd.org/content/dam/oecd/en/publications/reports/2001/11/behind-the-corporate-veil_g1ghgb3e/9789264195608-en.pdf. Retrieved .
- maples.com, BVI Trusts and Succession Planning: Options and Structures, Maples Group. https://maples.com/knowledge/bvi-trusts-and-succession-planning-options-and-structures. Retrieved .
- walkersglobal.com, Protecting the vulnerable beneficiary Guernseys toolkit beyond discretionary trustS. https://www.walkersglobal.com/en/Insights/2026/05/Protecting-the-vulnerable-beneficiary-Guernseys-toolkit-beyond-discretionary-trustS. Retrieved .
- walkersglobal.com, Trustees duties to notify discretionary beneficiaries. https://www.walkersglobal.com/en/Insights/2026/02/Trustees-duties-to-notify-discretionary-beneficiaries. Retrieved .
- careyolsen.com, Types and uses of Cayman Islands law trusts | Carey Olsen. https://www.careyolsen.com/insights/briefings/types-and-uses-cayman-islands-law-trusts. Retrieved .
- careyolsen.com, 1559. https://www.careyolsen.com/briefing/pdf_generate/1559. Retrieved .
Dates in this block record when each source was read for this page.