The looming threat of a sharp cut in the gift and estate-tax exemption spurred many wealthy families to set up trusts in a hurry in late 2012; as a result many trusts were put in place using cookie-cutter documents that could be executed quickly. Now some families are doubling back to provide trustees with more detail about how they want their money to be used to benefit heirs. So-called letters of wishes have long been common in the world of trusts and estates. The letters, which aren’t binding, typically reflect the priorities parents and grandparents want trustees to take into account when doling out funds, such as paying for education up to a certain level. A letter of wishes can supplement a trust’s official documents, providing additional guidance that the trustee has the option to consult, though the letters are often not disclosed to beneficiaries.
Wall Street Journal June 14, 2014
