A trustee letter – sometimes referred to as a letter of instruction or statement of intent – is a key document that provides further explanations and guidance beyond the formal estate planning updates. While it’s not legally binding, it plays a critical role in expressing the long-term intentions, wishes, and goals of a person regarding the management and distribution of their estate. The process of writing a trustee letter demands careful consideration and clear communication of your values and unique situation.
Establishing Your Intent
When drafting a trustee letter, the most fundamental aspect to bear in mind is conveying your intentions clearly and meaningfully. Start by sharing your thoughts about wealth, how it was accrued, and what it signifies to you. Explain your long-term goals such as whether you wish to see the assets used for educating the beneficiaries or invested to grow over generations.
- Identifying Key family players: If you have any specific insights into the dynamics or history of your family that may impact the implementation of the estate plan, it’s beneficial to note those as well. For instance, your executor would be better prepared if they understand family working patterns.
- Highlighting matters of significance: Use your trustee letter to emphasize values that you hold dear, shed light on unique circumstances or to provide a rationale for distinctive fund distributions. Having these instructions detailed unambiguously equips the trustee to manage potential challenges smoothly.
Statement of Purpose in the Trust Document
Another important element to consider when writing a trustee letter is the Statement of Intent or Purpose within the Trust Document. Despite its crucial role in guiding the trustee’s actions, many trust documents often overlook stating the trustmaker’s purpose for setting up the trust.
- Legal Directions: A statement of intent or purpose essentially offers legal directions and guidelines for the management of the trust. Whether aiming to reduce estate taxes, safeguard accounts and property from beneficiaries’ creditors, or educate beneficiaries in financial management, you should clearly include these as material purposes of the trust.
- Letters of Intent: Working in tandem with the legal trust document, a letter of intent is a nonbinding document that provides more intimate, personal directives to the trustee. This could be about your wishes to continue family traditions, maintain connections, or very personal concerns regarding beneficiaries which you wouldn’t want outlined in the formal trust document.
Preparing the Trustee Letter
Addressing the letter requires a formal format. Directly mention the specific title or role of the trustee as part of the address, such as “Mrs. Jane Doe, Trustee”. This is followed by a respectful salutation of “Dear Mrs. Doe,”.
- Revisiting your Intent: Your letter’s contents should undergo regular revisions to ensure it remains up-to-date with your latest desires and circumstances. Remember, it can be as uncomplicated as a typed document or handwritten letter, and can be revoked and modified whenever necessary.
Conclusions
Writing a trustee letter is an invaluable opportunity to facilitate a smooth transition and management of your assets. Not only does it help minimize possible disputes, but it also offers the chance to pass on wisdom and values beyond the material wealth. Remember that the letter, despite being flexible, should be prepared with thoughtful insight and consideration, directly communicating your wishes to the executor or trustee.