Letter of Wishes

A Letter of Wishes is an informal document written by the settlor (the person who creates a trust) to provide guidance to the trustee on how the trust’s assets should be managed and distributed. Unlike a trust deed, a Letter of Wishes is not legally binding but serves as a supplementary document to express the settlor’s personal intentions.

In Gibraltar, Letters of Wishes are commonly used in Discretionary Trusts, where trustees have significant flexibility in deciding how to allocate assets among beneficiaries. The letter might outline preferences such as:

Prioritising certain beneficiaries.

Setting conditions for asset distribution, such as reaching a specific age or achieving milestones.

Managing assets for future generations.

A Letter of Wishes provides insight into the settlor’s intentions, helping trustees make decisions aligned with the settlor’s goals. However, because it is not legally enforceable, trustees are not obligated to follow its instructions. For this reason, it is critical to work with experienced professionals when drafting both the trust deed and the Letter of Wishes.