Memorandum Of Wishes Template for Australia
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What is a Memorandum Of Wishes?
The Memorandum of Wishes is a complementary document to a trust deed or will in Australian estate planning. It serves as a crucial communication tool between the settlor and trustees, providing detailed guidance about the settlor's intentions for trust administration and asset distribution. While not legally binding, the document helps trustees make informed decisions that align with the settlor's wishes, particularly in situations not explicitly covered by the trust deed. A Memorandum of Wishes typically includes information about distribution preferences, investment principles, specific considerations for beneficiaries, and other relevant guidance for trust management. It's particularly valuable in discretionary trusts where trustees have significant decision-making power and need to understand the broader context of the settlor's intentions.
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Frequently Asked Questions
Is a Memorandum of Wishes legally binding in Australia?
No, a Memorandum of Wishes is not legally binding under Australian law. It serves as non-binding guidance to help trustees understand your intentions for trust administration and asset distribution. While trustees should consider your wishes carefully, they retain discretion to make decisions based on beneficiaries' circumstances and legal requirements under the Trustees Act 1925 (NSW) and equivalent state legislation.
Can my trust still operate without a Memorandum of Wishes?
Yes, your trust can legally operate without a Memorandum of Wishes under Australian law. However, trustees will have less guidance about your specific intentions and preferences for asset distribution and trust management. This may lead to decisions that don't align with your original objectives, particularly in complex family or financial situations where your wishes aren't clearly documented elsewhere.
How often should I update my Memorandum of Wishes in Australia?
You should review and update your Memorandum of Wishes whenever significant life events occur, such as births, deaths, marriages, divorces, or major changes in financial circumstances. Australian estate planning lawyers typically recommend reviewing the document every 3-5 years to ensure it remains current and reflects your evolving family situation and objectives for the trust.
How is a Memorandum of Wishes different from a Will in Australia?
A Will is a legally binding document that distributes your personal assets after death under the Succession Act 2006 (NSW) and equivalent state laws, while a Memorandum of Wishes provides non-binding guidance for trust administration during your lifetime and beyond. Your Will deals with assets you personally own, whereas the Memorandum guides trustees on assets held within the trust structure.
How long does it typically take to prepare a Memorandum of Wishes?
A straightforward Memorandum of Wishes can typically be prepared within 1-2 weeks in Australia. However, complex family trusts with multiple beneficiaries, business interests, or international assets may take 4-6 weeks to properly document. The timeline depends on the complexity of your situation and how quickly you can provide necessary information to your lawyer or advisor.
Can my Memorandum of Wishes override my trust deed in Australia?
No, a Memorandum of Wishes cannot override your trust deed under Australian law. The trust deed remains the legally binding document that governs the trust's operation and trustees' powers. Your Memorandum provides guidance within the framework established by the trust deed, helping trustees exercise their discretion in ways that align with your intentions while respecting legal boundaries.
What mistakes should I avoid when writing a Memorandum of Wishes?
Common mistakes include being too vague about your intentions, contradicting the trust deed's terms, failing to consider tax implications, and not updating the document after major life changes. Avoid making demands that trustees cannot legally fulfill and ensure your wishes are realistic given the trust's assets and Australian tax laws. Always keep the document confidential and store it securely.
About the Memorandum Of Wishes
A Memorandum of Wishes is an essential estate planning document that provides non-binding guidance to trustees about your intentions for trust administration and asset distribution. Under Australian law, while this document doesn't create legal obligations, it serves as a crucial communication tool that helps trustees understand your broader objectives and make decisions that align with your wishes.
When do you need this document?
You need a Memorandum of Wishes when establishing or managing discretionary trusts, family trusts, or testamentary trusts where trustees have significant decision-making power. This document becomes particularly valuable when the trust deed doesn't cover specific scenarios or when you want to provide context for distribution decisions. It's also essential when your circumstances change, such as family developments, business changes, or shifts in beneficiary needs. Many settlors create this document alongside their trust deed to ensure trustees understand both the legal framework and the personal intentions behind the trust structure.
Key legal considerations
While a Memorandum of Wishes is non-binding under Australian law, trustees are generally expected to consider it when making discretionary decisions. The document should clearly state its non-binding nature to avoid confusion about legal obligations. Key clauses should cover distribution preferences, investment principles, specific beneficiary considerations, and circumstances that might trigger different approaches. You should regularly review and update the document to reflect changing circumstances, as outdated guidance may not serve your current intentions. It's crucial to ensure the memorandum doesn't conflict with the trust deed's terms, as the deed remains the legally binding document governing the trust.
Legal requirements in Australia
Australian law doesn't impose specific formal requirements for Memorandums of Wishes, but certain practices enhance their effectiveness. Under the Trustees Act 1925 (NSW) and equivalent state legislation, trustees must act in good faith and consider relevant factors when exercising discretionary powers. While not legally required, signing and dating the document, having it witnessed, and storing it securely with the trust deed creates a clear record of your intentions. The document should identify the related trust, reference the trust deed, and clearly state the settlor's identity. Some states may have specific provisions under their respective Trust Acts that affect how trustees should consider such guidance, so understanding your jurisdiction's requirements is important for ensuring the document serves its intended purpose effectively.
GOVERNING LAW
Applicable law
This Memorandum Of Wishes is drafted to comply with Australia law. Key legislation includes:
Succession Act 2006 (NSW) and equivalent state legislation: Governs the administration of estates and succession planning, relevant when the Memorandum of Wishes relates to estate planning
Trust Act 1973 (QLD) and equivalent state legislation: Regulates the administration of trusts and trustees' powers, important for understanding the context in which the wishes will be carried out
Family Law Act 1975 (Cth): May be relevant if the Memorandum of Wishes includes provisions affecting family members or in case of family dispute
Tax Administration Act 1953 (Cth): Important for understanding tax implications of wishes expressed in the memorandum, especially regarding distribution of assets
Income Tax Assessment Act 1936 (Cth): Relevant for tax considerations in asset distribution and trust income
Privacy Act 1988 (Cth): Relevant for handling personal information contained within the memorandum
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