How do I include instructions for managing a trust if I am currently the trustee of another person’s assets?
When considering instructions for managing a trust where you serve as the trustee for someone else's assets, it's crucial to follow these steps:
Review the Trust Terms: Beforehand, you will need to examine the existing trust terms regarding the nomination of replacement or successor trustees. These terms outline the procedures and powers concerning trustee appointments.
Understand Discretionary Powers: Depending on the trust terms, you may or may not have discretionary powers to appoint successor trustees. This discretion grants you the authority to designate individuals who will assume trustee responsibilities in the future.
It's important to note that if the trust terms do not grant you discretionary powers, you won't be able to dictate the identity of successor trustees or provide subsequent instructions. Ensure you understand any limitations imposed by the trust terms.
Consider Drafting a Letter of Wishes: If the trust terms allow you to appoint successor trustees, it's advisable to draft a separate letter of wishes regarding the trust. This document serves as a supplementary guide for the appointed successor trustee(s) and helps avoid confusion between your personal assets and assets held in the trust.
A Letter of Wishes, also known as a Letter of Instruction or Memorandum of Wishes, is a document that provides guidance and instructions to the individuals responsible for administering an estate, Trust or other affairs. This letter typically addresses non-legal, personal, and discretionary matters that are not covered the existing documents.
It does not have the same formal legal requirements, such as witness signatures, that a Will does. Instead, it serves as a supplemental document that can help guide the intended personnel on your intentions and preferences. While it is not legally binding, it is usually respected and considered by those concerning, and in the worst case scenario, as a consideration during litigation.
Here's a sample format which you can use as reference for this particular case:
LETTER OF WISHES FOR [NAME OF TRUST]
I, [Your Name], currently serving as the trustee of [Name of Trust], hereby express my wishes and guidance regarding the management and administration of the trust assets upon my death. This letter is intended to provide clarity and direction to the successor trustee(s) who may be appointed in accordance with the terms of the trust.
- Overview of Trust Assets. As of [Current Date], the trust fund consists of the following assets and liabilities:
- [...]
- [...]
- Appointment of Successor Trustee(s). In the event of my death or incapacity, I hereby authorize and request the appointment of [Name of Successor Trustee(s)] as successor trustee(s) to manage the trust assets. I trust that they will act diligently and in accordance with the terms of the trust document. Should [Name of Successor Trustee(s)] die before me, refuses to act or is unable to act, or his/her appointment does not take effect for any other reason, I appoint the following personnel in order of priority to replace him/her:
- [...]
- [...]
- Management of Trust Assets. [List down instructions on management of the assets]
- Communication and Reporting. [List down instructions such as the frequency to communicate with the trust beneficiaries]
- Professional Advice. The successor trustee(s) are encouraged to seek professional advice when necessary, especially regarding complex matters related to the trust administration. You can seek help from the various personnel:
- Financial Matters - {Name}, {Contact Details}
- [...]
- Other Matters. [...]
This letter of wishes is to be considered as a supplement to the trust document and a guide for the successor trustee(s) in carrying out their responsibilities. I express my gratitude to the successor trustee(s) for undertaking the responsibility of managing the trust assets. I have full confidence in their ability to fulfill their duties with integrity and diligence.
Sincerely,
[Signature]
[Your Name]
[Date]
As the Letter of Wishes is not legally binding nor part of the actual Will/Trust document, there is no right or wrong way to draft it so long as it does not contradict the existing trust terms. getArrange do not advice on the wording of this Letter of Wishes.
To add a Letter of Wishes to refer to in your Will, separately print out the Letter of Wishes and label it clearly and make reference to the Letter of Wishes in your Will. Do keep the Letter of Wishes and the trust's existing trust deed alongside your Will (i.e. keep them at where you safekeep your Will).
In the platform, under Select Clauses >> Other Instructions, key in the following:
I am the trustee of [Name of Trust]. Please refer to the existing trust deed and my Letter of Wishes titled "Letter of Wishes for [Name of Trust]" found together with my Will, for additional guidance on the trust and assets held in trust by me.
