Why Memoranda of Wishes Matter for Trustee Decision-Making

When a family trust is established, the trust deed records the legal structure: who the beneficiaries are, what powers the trustees hold, and the framework within which those powers must be exercised.

What the deed usually does not do is explain how the settlor expects trustees to exercise those powers in practice. That is the role of a memorandum of wishes.

A memorandum of wishes is a separate document that guides trustees on the exercise of their discretions. It does not amend the trust deed and it is not legally binding, but it provides practical guidance about how the settlor wanted trustee powers to be used.

What a memorandum of wishes does — and does not do

A memorandum of wishes:

• does not override the trust deed

• does not create legal obligations

• does not define who the beneficiaries are

Those matters belong in the deed.  

Instead, a memorandum of wishes assists trustees by setting out:

• which beneficiaries the settlor expected to be prioritised in practice

• how competing beneficiary interests should be weighed

• when trustees might reasonably exercise their powers

• the considerations the settlor regarded as relevant when discretion is exercised

It does not tell trustees what they can do. It explains how the settlor expected them to approach decisions.

Priority is not entitlement

Most trust deeds already identify primary beneficiaries and confer wide discretionary powers on trustees.

A memorandum of wishes operates at a different level. It may indicate, for example, that:

• certain beneficiaries’ interests should generally take precedence

• others should only be considered in defined circumstances

• capital should usually be preserved rather than distributed

• trustees should take a long-term view rather than respond to short-term requests

This does not remove other beneficiaries from consideration. It provides a framework for prioritisation that a discretionary trust deed itself leaves open.

Why memoranda should be prepared at the outset

When a trust is first settled, the settlor is usually clear about why the trust is being created and how they expect it to operate. If that guidance is not recorded at the time, trustees may later be left with a legal structure but little context.

A memorandum gives trustees a reliable reference point when discretion needs to be exercised, sometimes many years later.

Why review and update matter

A memorandum of wishes is not static.

Family dynamics, beneficiary needs, asset levels, and settlor priorities change over time. A memorandum that has not been reviewed can become disconnected from current circumstances.

Where multiple memoranda exist, trustees must consider them in context. More recent expressions of wishes will generally carry greater weight, but older documents do not automatically fall away. Lack of clarity increases the difficulty of trustee decision-making.

How courts and trustees treat memoranda

Courts consistently treat memoranda of wishes as guidance, not direction. Trustees are not bound to follow them, but they are relevant when assessing whether trustees have:

• considered relevant matters

• exercised discretion properly

• acted consistently with the trust’s purposes

A current, coherent memorandum often supports trustee decision-making. An outdated or inconsistent one may justify departure from it.

Disclosure considerations

Trustees are required to hold any memorandum of wishes as part of the trust records. Whether it must be disclosed to beneficiaries depends on the statutory disclosure framework and the circumstances of the trust.

Clear and current memoranda place trustees in a stronger position when making disclosure decisions.

Practical consequences of neglect

Where no memorandum exists, or where it has not been reviewed for many years, trustees are more likely to face:

• uncertainty about how to prioritise beneficiaries

• difficulty justifying discretionary decisions

• increased scope for challenge

These issues arise not because the trust deed is defective, but because trustees lack guidance on how discretion was intended to be exercised.

A practical observation

A memorandum of wishes does not replace trustee judgment. It assists trustees when making decisions.

Preparing one at the outset, and reviewing it as circumstances change, is one of the simplest ways to ensure that trustee decision-making remains aligned with the settlor’s thinking over time.

If you have a trust where no memorandum of wishes exists, or where the document has not been reviewed for some time - or is generic in nature and doesn't add any value or context for the trustees, addressing that gap as part of a wider trust review can bring clarity for both trustees and beneficiaries.  It can also ensure that the people the settlor intends to benefit are in fact a class of beneficiaries in the trust deed.