Trusts in a Will: A Plain-English Guide

The most common reason is protecting money for children until an age you choose, rather than it passing to them outright at 18. Left directly, an 18 year old inherits absolutely and can spend it however they like; a trust lets you specify an older age, or leave it to trustees' discretion, before capital is released.

Trusts are also used to provide for a vulnerable beneficiary, someone with a disability or condition that means they cannot manage money themselves, without disqualifying them from means-tested benefits that a direct inheritance might affect. A discretionary trust, in particular, can be structured so the beneficiary has no automatic right to demand capital, which usually keeps benefits assessments unaffected, though specialist advice is essential to get this right.

In blended families, a trust can let a surviving spouse benefit from an estate, often via a life interest trust, while ultimately preserving capital for children from an earlier relationship. See our dedicated guide on life interest trusts for how this specific structure works.

You, as the person making the will, are the settlor, the one who sets the trust's terms. Trustees are the people who hold legal ownership of the trust assets and are legally responsible for managing them according to the trust's terms and in the beneficiaries' interests; they can be family members, friends, professionals, or a mix.

Beneficiaries are the people who ultimately benefit, though depending on the type of trust, they may have an immediate right to income, a right to capital at a future date, or simply be considered at the trustees' discretion. Choosing trustees carefully matters enormously, since they will need to act responsibly, sometimes for many years, and understand the duties they are taking on.

A bare trust gives the beneficiary an absolute right to the assets, often used simply to hold a young child's inheritance until they turn 18, with little ongoing decision-making by trustees. A discretionary trust gives trustees flexibility to decide how and when to distribute income or capital among a group of potential beneficiaries, useful for vulnerable beneficiaries or where circumstances may change.

A life interest trust (sometimes called an interest in possession trust) gives one beneficiary, often a surviving spouse, the right to income or use of an asset (commonly the family home) for their lifetime, with the capital passing to different beneficiaries afterwards. Each type has different tax and administrative consequences, which is why the right structure depends entirely on your specific family and financial situation.

Trusts can be subject to their own inheritance tax charges, separate from your personal estate, including periodic charges every ten years and exit charges when capital leaves the trust, for many discretionary trusts. Trustees also usually need to register the trust with HMRC's Trust Registration Service and may need to submit tax returns depending on the trust's income.

These ongoing obligations are a real, practical burden on whoever you appoint as trustees, and should factor into your decision about whether a trust is genuinely needed or whether a simpler, direct gift with a guardian managing funds informally might achieve enough of what you want.

The legal wording that creates a valid, effective trust is technical, and small errors can produce unintended results: assets ending up with the wrong people, unexpected tax charges, or a trust that a court later interprets differently from what you meant. This is not an area suited to a standard template.

If, having read this guide, a trust looks like it might suit your circumstances, the right next step is a conversation with a solicitor who specialises in wills and trusts, who can also explain the ongoing costs and duties involved for your chosen trustees.