Letter of Wishes (New Zealand)

A Letter of Wishes is a personal document that sets out your wishes, guidance, and intentions for your executor, trustees, and family — supplementing rather than replacing your formal Will. In New Zealand, a Letter of Wishes is not legally binding in the same way as a Will made under the Wills Act 2007. An executor is not legally obliged to follow your Letter of Wishes, though trustees of a discretionary trust are expected to consider it in good faith when exercising their discretion. The legal effect of a Letter of Wishes depends on how it is used: (1) For executors, it provides guidance on matters not covered by the Will — for example, the distribution of personal belongings among family members, funeral preferences, or messages to beneficiaries. (2) For trustees of a discretionary trust, the Letter of Wishes is the primary mechanism for guiding the trustees' exercise of their discretion over trust distributions, and trustees must consider the wishes expressed. Under the Trustee Act 1956, trustees have a duty to act in the interests of beneficiaries, and considering the settlor's Letter of Wishes is part of this. A Letter of Wishes should be kept with the Will but may be updated at any time without the formal requirements of a Will.

A New Zealand Letter of Wishes can cover a wide range of personal and practical matters that complement your formal Will. Common contents include: guidance on the distribution of personal items (jewellery, furniture, family heirlooms) among family members, especially where these are not specifically bequeathed in the Will; your wishes regarding funeral and burial or cremation arrangements, including preferences for a specific location, type of service, and readings or music; messages or explanations for family members about why you have made particular decisions in your Will; guidance for trustees of a discretionary trust about how you wish trust assets to be managed and distributed — for example, whether you would like the trust to support education, provide for a child with special needs, or maintain a family property; information about digital assets and where access credentials are stored; your wishes regarding business succession if you own a business; and guidance on charitable giving. The Letter of Wishes should be written in clear, plain language, dated, and signed (though formal execution requirements do not apply). Updating the Letter of Wishes regularly ensures it remains accurate and relevant.

A Letter of Wishes plays a particularly important role where a testamentary trust or inter vivos trust is established under New Zealand law. Under the Trusts Act 2019 (which replaced the Trustee Act 1956 for most purposes from 30 January 2021), trustees of discretionary trusts have wide powers to distribute income and capital among beneficiaries. Because the beneficiaries have no fixed entitlement to any distribution, the settlor's Letter of Wishes is the primary mechanism for communicating how the settlor intended the trust to benefit them. Trustees are not bound by the Letter of Wishes, but under their general duty to act in the interests of beneficiaries (s 25 of the Trusts Act 2019) and their duty to consider the exercise of their powers (s 26), they must consider the Letter of Wishes when making distribution decisions. The Letter of Wishes can specify: the priority of different beneficiaries; the purposes for which distributions should be made (education, housing, medical costs); the ages or milestones at which capital distributions are appropriate; and guidance on how to balance the interests of competing beneficiaries. The Letter of Wishes should be updated whenever the settlor's circumstances or intentions change, and trustees should be given updated versions promptly.

A Letter of Wishes itself cannot typically be challenged in the way a Will can be challenged under the Wills Act 2007 or the Family Protection Act 1955, because it is not a binding legal document. However, disputes relating to a Letter of Wishes may arise in several contexts. First, if trustees of a discretionary trust ignore a clear Letter of Wishes without reason, beneficiaries may challenge the trustees' decision-making process (not the Letter of Wishes itself) on the grounds that the trustees failed to properly consider the settlor's wishes. Under the Trusts Act 2019, beneficiaries have rights to request information about trust decisions. Second, if the executor distributes personal items inconsistently with the Letter of Wishes and beneficiaries believe the distribution was unfair or dishonest, they may bring a claim against the executor under the Administration Act 1969. Third, if the Letter of Wishes purports to make specific promises to beneficiaries that amount to a contractual obligation (unusual but possible), those promises may be enforceable as a contract. To avoid ambiguity about the legal effect of a Letter of Wishes, it should clearly state on its face that it is a non-binding expression of wishes and not intended to be legally binding.

A Letter of Wishes (New Zealand) does not legally require a lawyer in New Zealand, and individuals and businesses may draft and execute the document independently. The Wills Act 2007 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified New Zealand lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The High Court of New Zealand has jurisdiction over disputes arising from this type of document, and Companies Office may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.