Recalde Law Firm, P.A. is a Florida law firm with an office in Miami, Florida. We advise on United States law only. We do not practice Mexican law, and we do not give Mexican tax or succession advice. We do not practice the law of any other country. Formation of a non-U.S. entity, and the local law of that jurisdiction, are matters for local counsel. We handle the U.S. architecture: classification, the documents a U.S. custodian and a U.S. court will read, and coordination with the family's tax adviser.
A letter of wishes tells the trustee what the settlor hopes the trustee will consider. It is not a schedule of binding instructions, and it is not an amendment of the trust. If the trustee must follow it, the letter is a power, and powers belong in the instrument where they can be read against the control test and the grantor-trust rules. Families like the letter because it can be revised without a deed of amendment. That convenience is the risk.
The trust page is Foreign Trusts. The Spanish note is la letter of wishes y el instrumento del Trust. Protector powers, which are often confused with a letter, are in protectors and reserved powers.
What the deed has to carry
Successors to the trustee, the standard for distributions, who may add or exclude a beneficiary, and who may remove a fiduciary are terms of the trust. They decide how the trust operates when the settlor is dead or silent, and they are the terms a U.S. classification reads. Putting them only in a letter means the deed is incomplete and the letter is doing the work of a power. A court, a custodian, or a successor trustee who never saw the letter will administer the deed. The letter will not save them.
A letter can usefully say what the settlor would want the trustee to know: a child's circumstances, a preference among branches of the family, a hope that a residence be kept available. Those are facts and preferences. They are not a direction the trustee is obliged to obey.
Substance, if the letter is how the settlor still decides
U.S. classification looks at substance. If the trustee has agreed, in practice or in a side writing, to follow the letter, the settlor has retained a power whether or not the deed says the trustee has discretion. That retained power can matter for grantor status under the rules that apply to a foreign grantor, for the control test if a U.S. person is the one directing, and for estate inclusion of U.S.-situs assets the settlor is still treated as owning. We do not promise a result from adding or removing a letter. We read whether the letter has become the way decisions are made.
A pattern we see for families from Mexico, Argentina, or Chile is a short deed and a long letter that names who receives what, refreshed every year, with the trustee treating the letter as the instruction file. Families from Colombia, Peru, or Ecuador do the same with a different letter and the same deed. The home-country effect of that letter is for home-country counsel. The U.S. effect is that the deed and the letter have to be read together before anyone calls the trust a particular kind of grantor or non-grantor trust.
Amend the deed when the term matters
If the family wants a binding change, amend the instrument in the manner the instrument requires. Do not send a letter and assume the amendment happened. A custodian who is asked to code a standing instruction from a letter should be given an instrument that actually authorizes the signatory. See opening a U.S. account and choosing a trustee. The firm assigns responsibility for the classification that results. The tax adviser prepares the returns.