Memorandum of directions – my shot** at the legalese

With the end of year almost here again, it is timely to revisit an estate planning tool often looked at over the festive season, namely the use of letters of wishes or memorandum of directions.

If such a document is to be prepared it should ideally be done so only as part of a comprehensive estate plan.

Generally the following issues should be specifically set out in the document at the time it is signed, namely that:

1. a last will has been signed;
2. the memo of directions is intended to provide the trustees with some guidance in the administration of the estate but is in no way intended to change the provisions of the wills;
3. the trustees should be instructed to take into account that the comments set out in the memo of directions may not be relevant either at the date of death or at any other time in the future. Therefore the trustees should exercise any discretions under the will in the way they believe most appropriate in the circumstances;
4. to what extent other entities that form part of an overall estate plan (for example, superannuation fund, family trust or company), are to be regulated by the directions;
5. it is intended to be confidential, and should not be given to anyone other than the trustees and any professional advisers they engage from time to time;
6. the memo of directions has been completed and is current as at a certain date and that it has been signed.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from Hamilton and the song ‘My shot’. Listen here:

Memos of directions in relation to trusts

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses the issue of memos of directions, or letters of wishes in relation to trusts at the following link - https://youtu.be/B9NuAE3lIiM

As usual, a transcript of the presentation for those that cannot (or choose not) to view the presentation is below –

Memos of directions, or letters of wishes, are a classic example of the 'continuum's' that the court has to work in and the overall framework of appropriate public policy.

With letters of wishes, what the courts are generally trying to balance on the one hand, is the idea that they should be there to support the trustees and help them reach the right decision, against the argument that trustees are ultimately responsible to answer to the court and not be subject to anyone else's direction.

Many cases in this area have had factual scenarios where the letters of wishes are referred to in the reasons for a decision by the trustee and the beneficiaries have challenged the decision and directions were sought from the court.

Often, the court will release the letter of wishes and make it known to the beneficiaries. However, the decisions observe that the only reason that the letter of wishes even comes into play is because the trustee chooses to disclose the existence of them.

Therefore, from a planning perspective, it may be a conservative and pragmatic approach that letters of wishes, even if they exist, are not actually disclosed anywhere by the trustee.

Latest View Legal Apple and Android app launched

Following the successful launch last year of 5 View legal apps (in areas such as estate planning, business succession and SMSFs), we have now developed and launched another Apple and Android app.

The new app is in relation to creating a template Memorandum of Directions (MoD) and can be downloaded via the following links –

1. Apple – https://appsto.re/au/7ayT6.i
2. Android – https://play.google.com/store/apps/details?id=view.legal.mod 

A MoD can be an essential estate planning tool.

Importantly however, MoDs are generally only morally (not legally) binding and therefore do not change the provisions of a will.

The View Legal MoD app is designed to allow the user to narrow down some of the broad areas that might be relevant in relation to implementing, or updating, their MoD.

Depending on the answers provided, the app generates a free template memorandum of directions in PDF and word, allowing the user to then use this as a framework to complete the document as they wish. 

All 6 of the View apps can be downloaded via our website – see - http://viewlegal.com.au/download-our-latest-apps/

Until next week.