Why might you need a Memorandum of Wishes?

Following on from our last blog on family trusts, this week the spotlight is on Memoranda of Wishes.

A Memorandum of Wishes is an additional document the settlor of a trust can create to indicate to the trustees their intentions of how they want the Trust to be managed. This Memorandum is read alongside the Trust Deed and enables a settlor to effectively give directions as to how the Trust should be administered, particularly after death.

In contrast to a Will, where executors do not have the power to make distributions of your personal property, trustees do have the power to determine how capital and income from a Trust are to be distributed (subject to powers in the Trust Deed). A Memorandum provides guidance in this respect.

Although a Memorandum of Wishes is not binding on trustees, they would be expected to give the Memorandum careful consideration as to the wishes of the settlor. Thereby a settlor could in the Memorandum provide guidance on:  

-       The purpose and reasoning behind establishing the Trust;

-       Who is intended to benefit from the Trust;

-       Trust distribution date;

-       Distribution of Trust income and capital; and

-       Any discretionary powers of trustees.

 Because Memoranda of Wishes are not legally binding on trustees, it is common for settlors to revise their memoranda on a regular basis to reflect any changing opinions as time goes by. Whether you have an established Trust, or you are looking to create one it is recommended to have a Memorandum of Wishes alongside your Trust.

The team at Dawsons are happy to assist in creating a new or updated Memorandum of Wishes, either by making an appointment or through our online legal services.

Disclaimer: The information on this page is general information only and must not be relied on as legal advice.