As I was watching the first episodes of the final season of The Crown, knowing the tragic event that was coming all too soon, I wondered what happened to Princess Diana's estate.
Princess Diana died in a tragic car accident in 1997, shaking not only her family but the whole world. At the date of her death, her estate was valued by The High Court of Justice at a sizeable £21,711,485.00 and she had left a Will in place planning for the distribution of her assets. In her Will, she made gifts to her family, butler, and charities, with the primary beneficiaries of her estate being her two sons, William and Harry. Alongside her Will, she had also written a Letter of Wishes, requesting that three-quarters of her personal belongings be shared between Prince William and Prince Harry, and the one-quarter remaining to be distributed among her 17 godchildren.
However, since Letters of Wishes are not legally binding, her personal belongings were not distributed as she had intended. Instead of receiving a quarter of Diana's personal belongings, the godchildren were instead each allowed to choose only one of her items, from a selection chosen by the Executors. Furthermore, since Letters of Wishes are confidential and Executors have the discretion as to whether to disclose the letter to any beneficiaries, some beneficiaries only discovered the existence of Princess Diana's Letter of Wishes through court proceedings.
So, what is a Letter of Wishes?
A Letter of Wishes is a document accompanying your Will that notes your wishes or preferences and should be stored alongside your Will for ease. The purpose of a Letter of Wishes is not to change the contents of your Will, but rather to provide guidance to the Executors and Trustees when following the directions contained in your Will when administering your estate. For example, a Letter of Wishes can be useful to advise Executors and Trustees on the following matters:
- Distributing smaller assets in your estate, such as jewellery and personal effects
- Instructions for your funeral arrangements
- Expressing personal statements to family and friends
- Guidance on any Guardianship arrangements
- Providing reasoning behind instructions in your Will
Letters of Wishes are also a great tool for their flexibility- you can change or retract them at any time yourself, without the legal cost or procedure of officially changing your Will.
However, it is important to note that a Letter of Wishes is not a legally binding document, and as demonstrated by the handling of Princess Di's estate, the Executors or Trustees are not bound to follow its contents. A Letter of Wishes is confidential and unless the Executors or Trustees permit so, the beneficiaries are not entitled to see the document. Ultimately, a Letter of Wishes is a private note from you to your Executors and Trustees setting out non-binding guidance, which is why any instructions contained in a letter should be as clear as possible. You should also think carefully about who you appoint as your Executors and Trustees, as it is best practice to appoint individuals or professional bodies who don’t stand to gain from your estate and can follow your instructions without any personal objectives.
When should I make a new Will or Codicil instead of a Letter of Wishes?
The lesson here is that any instructions included in a Letter of Wishes may not always be followed and are treated as informal guidance, rather than formal directions, for how you would like your estate to be handled. Whilst a Letter of Wishes can be beneficial for dealing with smaller assets and expressing personal feelings, it is recommended that you address any major wishes you have for your estate in a formal legal document, particularly for any notable changes. By creating a new Will or amending your current Will by way of a Codicil, you can ensure that your Executors and Trustees are clear on your instructions and that anyone named in your Will has access to those instructions, whereas a Letter of Wishes may not be seen beyond the Executors’ eyes.
If you have any questions or would like to make or amend your Will with us, contact a member of Thorntons' Private Client team on 03330 430150.
