Written by Kim Kamin, JD, AEP® (Distinguished) and Cynthia D.M. Brown, JD, STEP
Estate planning today involves more than just drafting technically sound dispositive documents. Clients increasingly want their estate plans to reflect their values, guide future generations, and anticipate evolving family structures. At the same time, trustees, particularly corporate fiduciaries, are administering long-term discretionary trusts under heightened scrutiny in complex regulatory environments.
As attorneys construct trusts with broader distribution standards and intentional flexibility and as family structures become more complex, trust instruments alone are often not the appropriate place to convey the settlor’s nuanced intentions or to help trustees and other trust fiduciaries navigate changing times.
To address this reality, letters of wishes have emerged as a practical and increasingly popular planning tool. If thoughtfully designed, letters of wishes can be extremely effective. If carelessly drafted or inconsistently used, they can create significant problems, such as estate tax inclusion and litigation risks. For estate planning attorneys advising sophisticated families, understanding how clients can design and deploy letters of wishes can be the difference between a smooth trust administration and a turbulent one.
