A letter of wishes is a powerful, though non-binding, document that can provide invaluable guidance to the trustee of your testamentary trust, clarifying your intentions and values beyond the strict legal terms of the trust itself.
What is a Testamentary Trust and Why Use One?
A testamentary trust is created within your will and only comes into effect upon your death. It’s a powerful tool for managing assets for beneficiaries, particularly minors or those who may require long-term financial support. Roughly 55% of Americans do not have a will, leaving their assets to be distributed according to state law, which may not align with their desires. A testamentary trust ensures your wishes are followed. It differs from a living trust established during your lifetime; however, both serve the purpose of guiding asset distribution. The benefit of a testamentary trust is you don’t need to create it during your life, it’s simply added into your will.
What Does a Letter of Wishes Actually Do?
While the trust document outlines *how* assets are to be managed, a letter of wishes explains *why*. It allows you to communicate your hopes and preferences regarding distributions to beneficiaries—for example, specifying how you envision funds being used for education, healthcare, or specific life events. It’s crucial to understand that this letter isn’t legally enforceable like the trust itself. Think of it as your personal guide for the trustee, offering insights into your values and priorities. It’s a place to detail things like, “I would want my granddaughter’s college fund to prioritize programs in environmental science, as she’s always been passionate about that field.” A well-crafted letter of wishes can significantly enhance the trustee’s understanding of your intentions, leading to more effective and personalized asset management.
I Heard Stories of Trusts Going Wrong – What Can Happen?
Old Man Tiberius, a wealthy but eccentric collector of antique clocks, left a substantial estate in a testamentary trust for his daughter, Clara. He’d drafted a meticulous trust document, outlining specific amounts for yearly allowances and education. However, he hadn’t included a letter of wishes. Clara, burdened by mounting debt and poor financial decisions, began using the trust funds for lavish vacations and speculative investments. The trustee, bound by the strict terms of the trust, felt powerless to intervene, as Clara was technically fulfilling the letter of the law. The situation spiraled, eroding the principal and leaving little for Clara’s future. It was a heartbreaking example of good intentions derailed by a lack of clear guidance beyond the legal framework. According to a recent study, nearly 40% of estate disputes stem from unclear or misinterpreted intentions.
How Can a Letter of Wishes Help Prevent Problems?
Following the unfortunate story of Old Man Tiberius, his neighbor, Mrs. Gable, a pragmatic woman with a keen eye for detail, decided to take a different approach. She created a testamentary trust for her two sons, along with a detailed letter of wishes. In this letter, she explained that while she wanted her sons to have financial security, she also wanted them to develop a strong work ethic and appreciate the value of money. She specifically requested that the trustee consider matching a portion of any earned income her sons generated, encouraging them to pursue meaningful careers. She also expressed her desire for a portion of the trust funds to be used for charitable giving, reflecting her lifelong commitment to community service. This thoughtful guidance ensured her sons received not only financial support, but also encouragement to live fulfilling and meaningful lives. It’s important to review and update your letter of wishes periodically, especially after major life events, to ensure it continues to reflect your current wishes and values.
Ultimately, a letter of wishes is a valuable supplement to your testamentary trust, providing a personal touch and offering guidance to the trustee beyond the legal requirements. It’s a way to communicate your values, hopes, and preferences, ensuring your legacy is carried out in a way that aligns with your vision.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
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| estate planning | revocable living trust | wills |
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Map To Steve Bliss Law in Temecula:
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Feel free to ask Attorney Steve Bliss about: “What should I know about jointly owned property and estate planning?” Or “What if the estate doesn’t have enough money to pay all the debts?” or “Can a living trust help avoid estate disputes? and even: “What happens to my retirement accounts if I file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.