Letter of Wishes (UAE)

A Letter of Wishes in the United Arab Emirates is a private, non-binding document addressed by a settlor or testator to the trustee of a DIFC or ADGM trust or to the executor of a registered Will, expressing the author's intentions, values, and guidance for how discretionary powers should be exercised for the benefit of beneficiaries. Unlike the trust deed established under DIFC Law No. 4 of 2018 or the Will registered with the DIFC Wills Service Centre under the DIFC Wills and Probate Registry framework, the Letter of Wishes is not a legally binding instrument. The trustee or executor is not obliged to follow it, but is expected to read it carefully and take it into account when exercising discretion.

The distinction between the trust deed and the Letter of Wishes is fundamental. The trust deed, governed by DIFC Law No. 4 of 2018 or the ADGM Trusts Regulations, sets out the binding obligations of the trustee — who the beneficiaries are, what powers the trustee holds, and the framework within which they operate. The Letter of Wishes supplies the human context behind those legal structures: the settlor's philosophy about wealth, their understanding of each beneficiary's character and needs, their wishes for how a family business should be managed, and their preferences for charitable giving. These are precisely the kinds of personal guidance that would be inappropriate to include in a legally binding document, both because they might fetter the trustee's discretion and because they may need to change as family circumstances evolve.

A Letter of Wishes is used across UAE estate-planning contexts. For a DIFC discretionary trust, where the trustee has wide powers to distribute income and capital among a class of beneficiaries, the Letter of Wishes is the settlor's primary tool for ensuring that the trustee understands the settlor's intentions without those intentions becoming binding legal obligations. For a Will, the letter may guide the executor on matters such as how to manage a UAE business during the estate administration period, whether to sell or retain UAE property, and how to handle any disagreements among beneficiaries.

The Personal Status Federal Decree-Law No. 41 of 2024 governs succession for Muslims in the UAE, and the Letter of Wishes works within any framework that involves discretionary decision-making. For non-Muslim testators with a DIFC Will or ADJD Will registered under Federal Decree-Law No. 41 of 2022 on Civil Personal Status for Non-Muslims, the letter gives the executor personal guidance that the formal legal document cannot easily accommodate.

Because the Letter of Wishes is not legally binding, it can be updated at any time without requiring re-execution or re-registration of the trust deed or Will. This flexibility is one of its greatest practical advantages, allowing the settlor to keep the guidance current with changes in family circumstances, asset values, or beneficiary relationships without the cost and formality of amending the underlying legal documents.

A Letter of Wishes in the United Arab Emirates is needed whenever a settlor has established a discretionary trust under DIFC Law No. 4 of 2018 or ADGM Trusts Regulations, or has registered a Will with the DIFC Wills Service Centre or the Abu Dhabi Judicial Department (ADJD), and wishes to give the trustee or executor personal guidance beyond the formal legal terms.

A letter is required when the settlor of a DIFC discretionary trust has given the trustee wide powers over distribution and wants to communicate the personal philosophy and family values that should inform those decisions. Without a Letter of Wishes, the trustee exercises discretion in an information vacuum; the letter ensures the trustee understands whether the settlor's priority was education, housing, business investment, or charitable giving.

A letter is needed when the trust or estate includes a UAE business — whether a mainland LLC governed by the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), a DIFC entity, or an ADGM company — and the settlor wishes to guide the trustee or executor on how the business should be managed, whether to retain or sell, and how to work with existing management during the transition period.

A letter is required when the testator has made a Will and wishes the executor to understand the relationships among the beneficiaries — which beneficiaries have special needs, which might disagree, and how the testator would want conflicts resolved, avoiding the need for the executor to apply to the DIFC Courts or Abu Dhabi Judicial Department for directions.

A letter is needed after major life events — the birth of a child, a change in a beneficiary's financial circumstances, a marriage or divorce within the family, or the acquisition of major UAE assets — when the settlor wishes to update the guidance without the expense and formality of re-executing the trust deed or re-registering the Will.

A letter is also required when the settlor has philanthropic intentions — for example, a wish to donate to the UAE Red Crescent Authority or an educational charity — that are important to the settlor but are not binding obligations in the trust deed. The letter communicates those wishes without creating a legal obligation that might restrict the trustee's flexibility.

An effective Letter of Wishes for the United Arab Emirates should contain the following elements to give the trustee or executor the clear, practical guidance needed to exercise discretion in line with the settlor's intentions.

Addressee and Trust or Will Reference: The letter should be clearly addressed to the named trustee of the specific trust, or to the executor of the specific Will, with the trust name and date, or the Will registration reference from the DIFC Wills Service Centre or Abu Dhabi Judicial Department (ADJD). This links the letter to the correct legal document.

Non-binding Status Acknowledgement: An express statement that the letter is not legally binding, that the trustee is not obliged to follow it, and that it is intended as guidance only. This prevents any suggestion that the letter fetters the trustee's discretion under DIFC Law No. 4 of 2018 or the ADGM Trusts Regulations.

General Philosophy: The settlor's overriding values and intentions for the trust or estate — for example, whether the settlor's priority is education, housing, the preservation of a family business, or the equal treatment of all beneficiaries. General philosophy helps the trustee navigate novel situations not specifically addressed in the letter.

Specific Wishes for Named Beneficiaries: Individual guidance for each primary beneficiary — their character, circumstances, and the settlor's wishes for how the trust fund should be applied to their benefit. For beneficiaries with special needs, addictions, or vulnerability, this section allows the settlor to communicate protective intentions without creating binding restrictions in the trust deed.

Distribution Timing Preferences: The settlor's preferred approach to distributing capital — for example, staged distributions at specified ages, or a preference against lump-sum payments — giving the trustee a frame of reference when deciding whether and when to advance capital.

Business and Property Guidance: Instructions on how the trustee should manage, retain, or dispose of a UAE business or property, including guidance on working with management, maintaining licensing requirements under the Ministry of Economy or relevant free zone authority, and the Central Bank of the UAE regulatory requirements for financial assets.

Charitable and Philanthropic Preferences: Any wish for charitable giving that the settlor regards as morally important but does not wish to impose as a binding obligation.

Conflict Guidance: How the trustee should approach disagreements among beneficiaries, and whether to involve the protector or seek the DIFC Courts' guidance under the trust deed's dispute resolution provisions.

Review Intention: A statement that the settlor intends to review the letter periodically — typically every two years or after any significant family or financial change — confirming that the most recent version supersedes all earlier ones. forms-legal.com provides this template as a starting point for UAE settlors and testators.

Completing a Letter of Wishes for the United Arab Emirates requires the settlor or testator to think carefully about the guidance they wish to give, rather than to document legal requirements. The letter is a personal communication, and its value comes from its specificity and honesty.

Step one: Address the letter correctly. Enter your full legal name and address as settlor or testator, the date the letter is signed in DD/MM/YYYY format, and the name of the trustee or executor to whom it is addressed. Then identify the trust or Will to which it relates — the trust name and date, or the DIFC Wills Service Centre or ADJD registration reference. This links the letter to the legal documents it supplements.

Step two: Articulate your general philosophy. Write a paragraph or two describing your overriding intentions for the trust or estate. What did you build these assets for? What values do you hope your beneficiaries will carry forward? How do you see the role of the trustee? This section helps the trustee navigate future situations the letter does not specifically address.

Step three: Give specific guidance for each beneficiary. Write a separate paragraph for each primary beneficiary, describing their circumstances, your relationship with them, and how you would like the trustee or executor to treat them. Be candid about any concerns — a beneficiary with financial management challenges, a child who needs more protection than their siblings, or a beneficiary in a difficult personal situation.

Step four: Address distribution timing. State your preferred approach to capital distributions — staged payments at specific ages, or a preference for income-only distributions in early years. If the trust deed leaves this entirely to the trustee's discretion, the letter provides the human context the trustee needs to exercise that discretion wisely.

Step five: Give guidance on any UAE business or property in the trust. If the trust fund includes a UAE business licensed by the Ministry of Economy, a Dubai Economy licence, or a free zone authority, describe your wishes for how the business should be managed during the transition period and whether you prefer it to be retained or sold. If UAE property is involved, state whether you wish it to be retained, rented, or made available to a particular beneficiary.

Step six: Add charitable preferences and conflict guidance. State any charitable wishes and how you would like the trustee to handle disagreements among beneficiaries. Then state your intention to review the letter periodically and sign and date it. Keep the original with the trust deed or Will, and provide a copy to the trustee or executor.

A Letter of Wishes in the United Arab Emirates is not a legally binding instrument. The formal legal requirements that govern the trust or Will to which it relates — the DIFC Trust Law (DIFC Law No. 4 of 2018), the ADGM Trusts Regulations, the DIFC Wills and Probate Registry framework, or Federal Decree-Law No. 41 of 2022 on Civil Personal Status for Non-Muslims — do not apply to the letter itself. There are no UAE statutory formalities for the execution of a Letter of Wishes, and no registration requirement.

Non-binding nature: The trustee of a DIFC trust operates under DIFC Law No. 4 of 2018 and the trust deed's terms. The trustee must exercise its discretionary powers honestly, in good faith, and in the best interests of the beneficiaries, and must have regard to the settlor's guidance in the Letter of Wishes as relevant context; but the trustee is not fettered by the letter and cannot be forced by a beneficiary to follow it. The DIFC Courts will not hold a trustee in breach of trust merely for departing from a Letter of Wishes, provided the trustee exercised genuine discretion.

Fettering risk: A Letter of Wishes that is expressed in mandatory terms — 'you must', 'you shall', 'the trustee is required to' — may risk being treated by the DIFC Courts as a binding side letter that fetters the trustee's discretion, potentially invalidating the discretionary trust structure. The letter should use precatory language — 'I wish', 'I would like', 'I request', 'I ask that you consider' — to avoid this risk.

Privacy: Unlike a Will registered with the DIFC Wills Service Centre, a Letter of Wishes is a private document not subject to registration. It should be marked confidential and addressed only to the named trustee or executor. The Personal Data Protection Law (Federal Decree-Law No. 45 of 2021) applies to any personal data included in the letter about beneficiaries, and the trustee must handle that data in accordance with the Law.

Admissibility in court: Where a dispute arises about the exercise of a trustee's discretion, the DIFC Courts may consider the Letter of Wishes as relevant evidence of the settlor's intentions, alongside the trust deed and any other relevant documents. Keeping the letter current and ensuring it reflects the settlor's actual wishes at the relevant time strengthens its usefulness as evidence of the settlor's intentions.

Mistakes in drafting a Letter of Wishes for the United Arab Emirates most often reduce its usefulness to the trustee or, in more serious cases, risk undermining the trust structure.

The most serious mistake is drafting the letter in mandatory language. Using words like 'shall' or 'must' risks creating obligations on the trustee that are inconsistent with the discretionary trust structure under DIFC Law No. 4 of 2018. The DIFC Courts may treat a letter in mandatory language as a binding side letter that fetters the trustee's discretion, which can undermine the entire trust's validity. The letter must use precatory language — 'I wish', 'I would prefer', 'I ask you to consider' — to preserve the trustee's genuine discretion.

A second mistake is failing to identify the trust or Will to which the letter relates. A letter that does not reference the trust name and date or the DIFC Wills Service Centre registration number may be disregarded by the trustee or may be applied to the wrong trust if the settlor has multiple trusts.

A third mistake is making the letter too vague. A letter that says only 'please look after my children' gives the trustee no practical guidance. The letter's value lies in its specificity: the names and ages of the beneficiaries, their individual needs and circumstances, the settlor's priorities, and practical guidance on assets like the family business.

A fourth mistake is failing to update the letter after major life events. A Letter of Wishes that reflects the family circumstances of ten years ago may mislead the trustee when a beneficiary has since married, divorced, developed special needs, or acquired wealth of their own. Reviewing the letter after every major family or financial change — and replacing outdated versions with a clearly dated new version — ensures the guidance is always current.

A fifth mistake is failing to communicate the letter's existence to the trustee. A Letter of Wishes that is locked in a safe and never delivered to the trustee is useless. The trustee should receive a copy at the time the trust is established and receive updated copies whenever the letter is revised. Keeping the trustee informed ensures the guidance actually influences the trustee's decisions when the time comes.