How to Draft Letters of Wishes for Offshore Trusts

A well-drafted letter of wishes is one of the most practical tools for guiding offshore trustees without tying their hands. It’s personal, it’s flexible, and when written thoughtfully it can prevent years of confusion and family tension. I’ve seen letters of wishes turn a vague plan into a well-understood legacy. I’ve also seen them go wrong—creating control risks, tax headaches, or hard feelings. The difference usually comes down to clarity, tone, and whether the letter respects how a trust actually works.

What a letter of wishes is—and isn’t

A letter of wishes (sometimes called a memorandum of wishes) is a private document from the person who set up the trust (the “settlor”) telling the trustees how they would like the trust to be run. It sits alongside the trust deed but does not form part of it.

Key characteristics:

Non-binding guidance: Trustees must retain and exercise their own discretion. Your letter should guide, not instruct.

Private—usually: Letters are typically confidential, though courts can order disclosure and trustees may decide to share them if it helps resolve issues.

Flexible and updateable: You can revise it as life changes—births, marriages, business exits, philanthropy.

What it isn’t:

Not a deed or variation: It cannot change beneficiaries or override the trust deed. If you want to change the structure or class of beneficiaries, that’s done by formal deed or appointment, with trustee and (if applicable) protector consent.

Not a place to control the trust: If you try to micromanage, you risk the trust being treated as a sham or the assets being attributed back to you for tax or creditor purposes.

Not a will: It can express wishes about how assets should be used during your lifetime and after, but it won’t replace a properly executed will for non-trust assets.

A few cases give useful colour:

Breakspear v Ackland [2008] (England) confirmed that letters of wishes are generally confidential but may be disclosed to beneficiaries if trustees decide it’s in the trust’s best interests.

Re Rabaiotti 1989 Settlement (Jersey) highlighted the court’s protective role and the principle that trustees must exercise independent judgment, even when a letter is strongly worded.

The takeaway: your voice matters, and trustees will pay close attention, but the letter cannot fetter their discretion.

When to use one—and who should write it

You should have a letter of wishes for nearly every discretionary offshore trust. It’s especially helpful when:

You have children or beneficiaries at different life stages

There’s a blended family or second marriage

You own illiquid or complex assets (operating businesses, real estate)

You want long-term philanthropy or a spend-down plan

You’re concerned about beneficiaries’ maturity, addiction, or creditor exposure

You foresee disputes or misinterpretation

Who writes it?

The settlor: Most letters come from the settlor and are addressed to the trustees.

Joint settlors: If spouses or partners created the trust, a joint letter is common. If your wishes diverge, consider separate letters or a clear tiebreaker.

Protector involvement: Some settlors address the protector as well, or write a separate note to the protector. That can help, but avoid creating an appearance that you still control decisions via the protector.

Legal and practical ground rules

Respect trustee discretion

Every offshore jurisdiction—Jersey, Guernsey, Isle of Man, Cayman, BVI, Bermuda, Singapore—expects trustees to exercise independent judgment. Your letter can be influential, but it must not direct. Using imperative language (“must,” “shall,” “under no circumstances”) undermines the legal structure.

Use precatory language:

“I would like the trustees to consider…”

“My wish is that…”

“I hope the trustees will take into account…”

Make sure it meshes with the trust deed

Your letter should align with:

The class of beneficiaries: Don’t ask trustees to benefit people who aren’t within the class.

Powers and consents: Some trusts require protector consent for distributions or investments. Don’t assume otherwise.

Investment powers and restrictions: If the trust deed prohibits certain assets or requires diversified investments, your letter can’t override that.

If something material needs changing, discuss a deed of amendment or appointment rather than trying to “fix” it via the letter.

Confidentiality and disclosure

Default position: Treat the letter as confidential between you and the trustees.

Real-world perspective: Draft with the expectation that a beneficiary might one day read it. Avoid disparaging remarks about family members or sensitive subjects. Focus on behaviours and outcomes, not personal attacks.

Trustee policy: Many corporate trustees have policies about disclosing letters upon request. Ask them how they handle it.

Control, sham, and tax risk

The biggest mistake I see is using a letter of wishes to exercise ongoing control. That can jeopardize the trust.

Practical red flags:

Requiring trustee pre-approval from you for every distribution or investment

Directing distributions to meet your personal obligations

Instructing trustees to follow your investment picks or to vote shares at your direction

Asking for copies of all minutes and insisting on sign-off

If you reserve too much control (even informally), tax authorities and courts may treat the trust as effectively yours. For US settlers, for example, that can trigger grantor trust treatment unintentionally; for others, it can collapse tax planning. Use the letter to share principles and outcomes, not commands.

Cross-border considerations

Forced heirship: In civil law or Sharia-influenced jurisdictions, heirs may have statutory rights. Many offshore trusts are robust against such claims, but your letter should acknowledge local realities and avoid combative language.

Reporting regimes: While the letter itself isn’t reportable under regimes like CRS or FATCA, avoid using the letter to coordinate undisclosed planning. Assume your trustee operates fully within their regulatory obligations.

Special regimes: With BVI VISTA trusts or Cayman STAR trusts, your letter may address investment or holding-company policy in ways traditional trusts do not. Keep the tone advisory and consistent with the statutory framework.

A step-by-step drafting process that works

Here’s the workflow I use with clients. It keeps the letter usable for trustees and true to the family’s goals.

1) Clarify purpose and horizon

Ask yourself:

What is this trust for? Safety net? Education? Business succession? Philanthropy? Wealth stewardship for generations?

Over what time frame? A spend-down within two generations or an enduring fund?

What’s the core philosophy? Examples: self-reliance over entitlement; support for education and first homes; health and security before luxury; entrepreneurial support.

Write this as a short preamble. Two paragraphs is usually enough.

Example: “My wish is to preserve a resilient, values-led pool of capital that supports education, health, and enterprise within my family, while avoiding dependence. I hope the trustees will prioritize needs, then opportunity, then comfort.”

2) Map beneficiaries and priorities

List the key people and their circumstances:

Partner or spouse

Children and stepchildren

Grandchildren

Named charities or causes

Others (longtime employees, relatives with special needs)

Then set priorities. For example:

Priority 1: My spouse’s financial security and housing for life

Priority 2: Children’s education through postgraduate level

Priority 3: Seed capital for entrepreneurial ventures that pass basic viability checks

Priority 4: Moderate lifestyle enhancements when prudent

Keep this to a compact list. Trustees like seeing the order of importance.

3) Decide on tone and disclosure

Choose your tone—personal and warm, yet professional. Decide whether you’re comfortable with trustees sharing the letter (or extracts) with beneficiaries. Add a line:

“I leave to the trustees’ discretion whether to share this letter, in whole or part, if doing so would help beneficiaries understand the trust’s purpose.”

4) Draft the core sections

Most letters benefit from the following structure:

Preamble and purpose

Family overview and values

Distribution wishes (during lifetime and post-death)

Education and development

Health and welfare

Housing policy

Entrepreneurship/employment support

Philanthropy

Investment posture and risk tolerance

Illiquid assets/business shares

Special circumstances (divorce, addiction, special needs)

Governance: role of protector, family meetings, communication

Administrative aspects (conflicts, version control, updates)

5) Use clear, precatory language

Keep sentences active and direct, but non-mandatory. Avoid legalese. Think how a thoughtful director would brief their board.

Instead of: “The trustees shall distribute adequate funds…”

Try: “I ask the trustees to consider distributions in the following circumstances…”

6) Build in flexibility and examples

Trustees appreciate examples. They show how you think without boxing them in.

Example wording: “By way of illustration, I would view a £30,000 contribution towards a Master’s degree in data science as aligned with the trust’s purpose, whereas funding an exotic vacation would not generally be, unless combined with a meaningful educational component.”

7) Sense-check against the trust deed and tax advice

Before finalizing:

Cross-check beneficiaries and powers against the deed.

Confirm any reserved powers or protector consent requirements.

Coordinate with tax advisers (especially for US persons or those with UK connections) to ensure language doesn’t imply control or economic benefit retention.

8) Review with the trustee

A short, pragmatic conversation with the trustees pays dividends. Ask:

Are any elements impractical?

Do they see potential conflicts with their duties?

Would they prefer more specificity on certain policies (e.g., investment risk)?

Integrate the feedback you agree with.

9) Finalize the document

Best practice:

Title it “Letter of Wishes” and include the trust’s formal name and date.

State explicitly that it’s non-binding and intended to guide discretionary decisions.

Sign and date it. A witness is not legally required but can help with authenticity. I prefer one independent witness with printed name and address.

Avoid notarization unless you have a reason; it can give an unnecessary air of formality.

10) Store, share, and diarize updates

Provide the original to the trustees; keep a scanned copy.

Keep version control simple: “Letter of Wishes v3, signed 12 March 2025.”

Schedule a review every 2–3 years, or after major life events.

What to include: practical content and sample clauses

Below are themes and sample paragraphs you can adapt. Keep them concise and consistent with your trust.

Preamble and philosophy

“My primary wish is that the trust provides stability without fuelling dependency. I ask the trustees to prioritise health, education, and productive opportunity. Comfort is welcome when it does not erode motivation.”

Spouse or partner

“I ask the trustees to consider my spouse, Sam, as the priority beneficiary during Sam’s lifetime, ensuring suitable housing and an income that allows a comfortable standard of living. I would be supportive of a life interest in the home we occupy at my death, with the capital preserved for the next generation where feasible.”

If your spouse is not a beneficiary, don’t ask trustees to benefit them. Instead, consider supporting them via your will or a separate trust.

Children and stepchildren

“I hope the trustees will treat my children and stepchildren as part of one family. Equality is desirable, but not at the expense of fairness—needs and circumstances should be weighed. Where one child has significant independent resources, the trustees may consider that when deciding distributions.”

Education

“I encourage support for education, broadly defined to include apprenticeships and vocational training. Funding may cover tuition, reasonable living costs, and required materials. As a guide, I consider undergraduate support and one postgraduate qualification appropriate where the beneficiary demonstrates commitment.”

Health and welfare

“Health costs, including counselling and addiction treatment, should be considered a priority. Where addiction or mental health challenges arise, I encourage the trustees to prioritise treatment over cash distributions and to condition support on compliance with a treatment plan.”

Housing

“I encourage the trustees to assist first-time home purchases for beneficiaries who show financial responsibility, preferably via loans secured on the property, or co-ownership, rather than outright gifts. The trustees may consider contributing 20–30% of the purchase price, subject to affordability and geographic market.”

Entrepreneurship

“I support seed funding for credible business ventures. Before funding, I would expect a basic business plan, a modest contribution from the beneficiary’s own resources, and external validation (for example, an independent mentor’s review). I encourage staged funding tied to milestones.”

Lifetime vs. post-death approach

“During my lifetime, I prefer modest distributions and a bias toward education and opportunity. After my death, I would be comfortable with a slightly more generous approach, provided that the trustees remain vigilant about creating dependence.”

Philanthropy

“I would like the trustees to allocate up to 5% of distributable income annually to charitable purposes aligned with education and climate resilience, focusing on transparent, measurable outcomes. Where appropriate, I encourage matching schemes to involve family members in giving.”

For larger philanthropic goals, consider a separate letter to reduce clutter.

Investment posture

“I favour a long-term, diversified portfolio with moderate risk, accepting volatility in pursuit of real capital growth over decades. I would prefer a bias toward low-cost, transparent strategies. Illiquid or concentrated positions should be justified by clear conviction and governance.”

Avoid directing specific trades or managers. If you have legitimate preferences, frame them as general principles.

Business ownership and voting

“If the trust holds shares in [FamilyCo], I hope the trustees will preserve the company’s long-term culture and consider retaining voting advisors with industry experience. Continuity of leadership matters; however, poor governance should not be tolerated. If a sale opportunity arises that materially de-risks family wealth, I encourage the trustees to explore it.”

For BVI VISTA or Cayman STAR structures, align the language with the regime’s expectations.

Special needs

“Alex has special educational needs and may require lifelong support. I encourage prioritising Alex’s care and quality of life, with professional advice as needed. Equality among siblings should yield to fairness in this context.”

Divorce and creditors

“In the event a beneficiary divorces or faces creditor action, I encourage the trustees to suspend cash distributions and consider paying for essentials directly (for example, rent or school fees) until the situation stabilises.”

Communication and governance

“I support periodic (for example, annual) trustee updates to adult beneficiaries about the trust’s purpose and general performance, at the trustees’ discretion. Family meetings can help transmit values; if helpful, I ask the trustees to coordinate an occasional meeting or letter to beneficiaries explaining the trust’s aims.”

Protector and advisers

“If there is uncertainty about my wishes, I encourage consultation with the protector and, where relevant, [name], who understands my values. Their views are not binding; they are offered as context.”

Be cautious naming yourself as the go-to decision-maker. If you are alive, your views can be sought, but trustees must remain independent.

Administrative notes

Non-binding: “Nothing in this letter is intended to bind the trustees’ discretion.”

Updates: “I may update this letter from time to time. The most recent signed version should be followed.”

Confidentiality: “I leave disclosure to the trustees’ discretion.”

Special scenarios and how to handle them

Second marriages and blended families

Tensions often arise between a surviving spouse’s security and children’s eventual inheritance.

Consider a life interest or housing right for the spouse, with capital preserved for children.

Provide guidance on remarriage or cohabitation—does the life interest continue?

Encourage trustees to consider prenuptial agreements if the trust assists with property purchases.

Example: “If Sam remarries or permanently cohabits, I would be comfortable with the trustees reconsidering the level of support to reflect the new household circumstances, while ensuring dignity and security.”

Entrepreneurs and concentrated assets

If the trust holds a private company:

Encourage professional board governance and clear reporting.

Recognise the concentration risk and articulate thresholds for considering diversification.

Avoid instructing the trustees to refuse all sale offers. Share your preferences, not commands.

Philanthropy with a family touch

If philanthropy is central:

Define themes (education, health innovation, conservation).

Encourage next-gen involvement via a junior grants committee with a modest annual budget.

Ask for impact reporting rather than branding or plaques.

US-connected families

US tax rules can change the calculus:

If a US person is a beneficiary or settlor, coordinate language with US tax counsel. Avoid implying retained controls that could trigger unfavorable treatment.

For grantor trusts, be mindful of how distributions and investments affect the grantor’s tax position.

The letter should avoid tax directives; keep it principle-based and leave structuring to formal advice and trustee implementation.

Families with civil law or Sharia connections

Acknowledge that trustees may face pressure from forced heirship regimes. Support their duty to apply the trust law of the jurisdiction.

Frame your wishes positively—focus on supporting dependants fairly, which often aligns with cultural expectations—rather than explicitly instructing trustees to defy specific legal claims.

Addiction, mental health, and spendthrift risks

Encourage professional assessments and treatment plans.

Use conditional support: payments direct to providers; small stipends tied to milestones.

Clarify that immediate needs (shelter, medical care) remain priorities even during difficult periods.

Cross-border relocation and emigration

Family members move. That can affect tax, lifestyle, and schooling.

Authorise trustees to seek local advice before major distributions.

Encourage neutrality: no beneficiary should be punished for relocating, but costs and complexities should be considered.

Common mistakes that cause real problems

Using directive language: “must,” “shall,” “under no circumstances.” Solution: switch to “I would like the trustees to consider…”

Contradicting the trust deed: Naming non-beneficiaries. Solution: if you want a new beneficiary, use a deed of addition.

Over-engineering: 15-page letters with rigid rules. Trustees need room to handle surprises. Aim for clarity, not code.

Making it all about money: Ignoring values, education, or behaviour guidance. Add a short section about character and contribution.

Venting about family members: Future disclosure is possible. Focus on conduct, not character.

Micromanaging investments: Selecting funds, demanding approvals. Frame risk tolerance and horizons instead.

Never updating: Life changes. Review every 2–3 years or after major events.

Storing it poorly: If the trustee can’t find it, it may as well not exist. Keep version control and deliver the signed original.

Updating, storage, and communication

Frequency: I see most families refresh letters every 2–3 years. Update on events like marriage, birth, death, sale of business, or major relocations.

Version control: Date and number each version. Include a short change note if helpful.

Storage: Send a signed original to the trustee; keep a scanned copy in a secure vault or encrypted drive. Confirm the trustee logged it in their system.

Communication with family: Decide how much to share. Some families circulate a one-page “purpose statement” while keeping the full letter private. That can set expectations and reduce anxiety without inviting legal arguments.

Successor planning: If your protector, business chair, or key adviser understands your values well, mention them. Avoid making your letter dependent on one person’s continued availability.

Working well with trustees and advisers

Engage early: Send a draft to the trustee for input. This surfaces issues before you sign.

Be open to simplification: Trustees prefer short, usable documents (4–8 pages) over long manifestos.

Align with investment policy: If the trust has an Investment Policy Statement (IPS), echo its risk language rather than creating a second standard.

Calibrate with tax and legal advisers: The best letters are legally safe and practically sensible. A half-hour alignment call can save years of trouble.

A model outline you can adapt

Heading: “Letter of Wishes,” trust name, date

Intro: Purpose and philosophy (1–2 paragraphs)

Beneficiaries: Who they are, priorities among them

Distributions: Lifetime vs. post-death, examples

Education and development: Scope and expectations

Health and welfare: Support approach

Housing: Loans/co-ownership policy, limits

Entrepreneurship: Criteria, staged funding

Philanthropy: Themes, suggested budget

Investment posture: Risk tolerance, horizon

Illiquid assets/business interests: Governance principles

Special situations: Divorce, creditors, special needs

Communication/governance: Transparency and family engagement

Protector/advisers: Consultation preferences

Administrative: Confidentiality, non-binding nature, updates

Signature block and optional witness

Quick drafting tips from practice

Keep it to 4–8 pages. If more, use annexes for detailed examples.

Write like you speak to a wise, independent board.

Use headings and short paragraphs; trustees skim under time pressure.

Include two or three concrete examples in each policy area.

Avoid dollar/percentage promises you might regret; frame ranges and principles.

Assume a beneficiary might read it—be kind and constructive.

End with encouragement: express trust in the trustees’ judgment.

Example snippets you can copy and tailor

Non-binding statement: “This letter is intended to guide and inform the trustees’ discretion. It is not binding upon them.”

Education example: “A reasonable approach would include tuition, course materials, and modest living costs for the duration of the programme, contingent on satisfactory progress.”

Entrepreneurship guardrails: “I ask the trustees to consider initial funding of up to [amount or range] with further tranches subject to milestone achievement.”

Housing safety valve: “If market conditions or the trust’s liquidity make assistance imprudent, I support the trustees in saying no.”

Disclosure flexibility: “If sharing this letter or an extract would calm concerns or improve cooperation, I encourage the trustees to do so.”

A short case study to bring it together

A founder sets up a Jersey discretionary trust holding a mix of liquid investments and 60% of a tech company. The family includes a second spouse, two adult children (one works in the business, one is a teacher), and a teenage stepchild. The founder wants to preserve the company through a likely sale in the next 3–5 years, ensure the spouse’s comfort, and prevent entitlement.

The letter of wishes:

Sets a clear order: spouse’s security, children’s development, long-term resilience

Encourages a life interest in the family home for the spouse, with capital preserved for the next generation

Supports staged entrepreneurship funding for the child in the business, but invites independent due diligence to avoid favouritism

Encourages education support for the teacher and eventually for the stepchild, with equality guided by fairness

Frames the tech company holding as valuable but subject to sale if risk becomes disproportionate

Suggests modest annual philanthropy with a family meeting to select causes

Asks the trustees to communicate a one-page purpose statement to adult beneficiaries

The trustees later used the letter to justify holding through to an agreed sale, supporting the spouse’s housing, and providing measured, equal support to the children without friction.

Final thoughts

A good letter of wishes sounds like you: principled, pragmatic, and aware that life changes. It gives trustees the story behind the structure and the space to do their job well. Craft it with care, revisit it as the family evolves, and treat it as a living bridge between your intentions and the trustees’ judgment. That combination is what keeps offshore trusts humane, effective, and resilient over time.