Nature
Non-binding
Binding defeats the purpose
Followed
In ordinary course
Trustees read it closely
Confidential
Usually yes
Not registered
Update
When circumstances change
No formal process
What it is and is not
A confidential document from the settlor to the trustee explaining how the settlor would like the trust administered. Trustees read it closely and follow it in the ordinary course. It is not part of the deed, not registered, and does not legally bind the trustee. Those three negatives are the design.
Why non-binding is the point
A trustee obliged to follow your instructions is a trustee acting as your agent. An agent's decisions are attributable to the principal. A court examining retained control will look at whether the trustee could exercise genuine discretion, and a binding document overrides that discretion before the hearing starts. Every reported Cook Islands contempt case has turned on variations of this question.
What to include
- Distribution preferences by beneficiary and circumstances, framed as guidance not instruction
- Specific assets you feel strongly about, with the reasoning
- Investment philosophy without directing specific trades
- Beneficiary circumstances the trustee would not otherwise know
- What should happen in your absence, including protector succession and family contacts
What to leave out
Language that reads as instruction. "The trustee shall" is wrong. "I would wish" or "my preference would be" is right. Commercially sensitive material you would not want produced in discovery.
Updating it
Write to the trustee with a new letter marked to supersede the previous one. No formal execution or witnessing required. Update whenever circumstances change materially: new beneficiary, changed financial position, death of a named person, new asset. Annual review is a reasonable default even when nothing significant has changed.
See the trust deed and reserved powers.
(Review & sourcing)
Written by
Connor Steens
BBus, business development
Reviewed by
John Evans
20+ years, offshore structuring
Last updated
General information
Sourced from
Trustee practice
Licensed Cook Islands trustees
01International Trusts Act 1984 — consolidated text.
02Trustee Companies Act 2014 — licensing requirements.
(COMMON QUESTIONS)
Frequently asked questions about the letter of wishes
No, and it should not be. A binding letter removes genuine trustee discretion and makes the trustee look like your agent.
In the ordinary course, yes, closely.
Generally yes. Not registered, but it exists on the trustee file and can be the subject of a court order.
'I would wish' or 'my preference would be', not 'the trustee shall'.
Whenever circumstances change materially, and at minimum annually.
No. Write to the trustee supplying the new letter marked to supersede the previous version.
It exists and can be the subject of a court order. Keep it free of commercially sensitive material.
Include what the trustee needs to administer properly, but be selective about anything harmful if produced in discovery.
(MORE ON THE SETUP)
References and articles on the Setup
References
In-depth reference pages on the Setup.
1 min
Cook Islands Trust Beneficiary Class
Who can benefit, why their discretionary interest is not attachable property, and the drafting choices that preserve flexibility.
1 min
Cook Islands Trust Letter Of Wishes
Non-binding guidance to the trustee. Why it must not be binding, what it should say, and how often to update it.
1 min
Cook Islands Trust Registration
What gets filed, what remains private, and why registration triggers the protective provisions rather than deed execution.
1 min
Funding A Cook Islands Trust
Learn how to fund a Cook Islands trust, including asset transfers, timing, and key considerations for effective protection.
1 min
Reserved Powers In A Cook Islands Trust
What you can keep without undermining the structure, what you should not, and the audit question every power must pass.
1 min
The Cook Islands Trust Deed
What must be in the deed, the five provisions that matter under pressure, and what cannot be included.
1 min
The Cook Islands Trust Duress Clause
Authorises the trustee to refuse a repatriation order. What it protects and what it cannot, explained through Anderson.
1 min
The Cook Islands Trust Jones Clause
Names a known creditor and authorises payment. The counterintuitive tool that weakens the fraudulent intent argument.
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