A Guide to Will Trusts

25 Apr 2024 | Jenny Walsh
english countryside

Table of Contents

What is a trust in a will ?

Setting up a trust in your will can protect assets for your loved ones while protecting your estate from unnecessary inheritance tax. Will trusts are versatile structures and can be tailored to fit the needs of you and your estate.

A trust is a legal arrangement that allows you to place assets (cash, property, investments) under the control of a trustee who will manage the assets for the benefit of beneficiaries. A will trust is simply a trust that you create in your will. The trust comes into effect when you die.

Who should set up a will trust?

If you know who you wish to inherit your wealth and are happy for assets to be transferred to the beneficiaries as soon as you die, then a well-written will can achieve that for you. There would be very little reason to set up a trust.

Trusts are usually established when your wishes cannot be achieved with a simple will. For example, if you would like a more structured release of assets, there are minor children or vulnerable adults involved, or you fear that beneficiaries may fritter funds away, then a will trust can be a useful tool. They allow you to create conditions and timelines that must be met before assets are distributed.

What are the different types of will trusts?

There are many different types of trust that you can establish in your will. The more popular options include:

  • A bare trust which gives named beneficiaries the right to receive both income and capital from the trust. This simple form of trust is often used for minor children who are not able to take legal title themselves.
  • A discretionary trust which gives the trustees broad powers to decide which of the beneficiaries receives funds from the trust, how much they receive and when they receive it. This flexible trust is often used to benefit future generations as you can specify a class of beneficiaries, such as “my grandchildren and their descendants.” The beneficiaries do not have to be named individually or even be born yet.
  • A life interest trust which gives someone the right to enjoy an asset during their lifetime but without ever owning the asset itself. This is often used to allow a spouse to continue living in the family home for as long as they wish but ultimately, the property will pass to children from a previous relationship.

What are the benefits of using a will trust?

Besides ensuring that your family are protected in the exact way you want, a will trust can:

  • Take advantage of all available tax reliefs and thus minimise Inheritance Tax
  • Protect your assets from divorcing partners or creditors
  • Protect your estate against possible care home fees in the future
  • Ensure that a current partner and children from a previous relationship are provided for
  • Leave assets for the benefit of vulnerable or disabled persons who may not be able to manage their finances on their own.

What are the disadvantages of using a will trust?

Like any trust, will trusts can be time-consuming to set up and the trustees have a lot of administration responsibility on their shoulders without much reward. Will trusts have their own tax and legal requirements, which can be very complex. It’s important to have experts on your side from the beginning to ensure that the trust is set up as robustly and tax-efficiently as possible. Trustees will often need the ongoing support of trust experts if they are to carry out their roles correctly.

Who needs a trust instead of a will trust?

A trust becomes effective at the time the assets are transferred into the trust. With a will trust, that happens upon death. Other trusts, called living trusts, become operative during your lifetime. With a living trust, the trustees take control of your assets immediately. This can be useful in certain situations, such as if you are unable to look after your own affairs due to illness or incapacity or if you wish to shield assets from future lawsuits and claims.

There are pros and cons to both will trusts and living trusts. Both potentially have a role to play as part of a comprehensive estate plan and should be discussed with your solicitor to determine which one is right for you.

How we can help?

Speak to a specialist trusts lawyer about an asset protection trust. Contact us to get started. Call 020 7485 8811 or fill in the contact form below.

Share this article


Contact us today

For a free initial conversation call 020 7485 8811

Email us Send us an email and we’ll get back to you

    • [Lisa Pepper] was always at the end of the phone

      Family department client

    • Sophie Davies specialises in brain injury and lower limb amputation cases.

      Legal 500 2023

    • "Naomi Angell is a highly esteemed practitioner who is highlighted as "a leader in the field" and "extremely knowledgeable" by interviewees. She is particularly recognised for her experience in complex adoption disputes."

      Chambers UK

    • Very clear & efficiently handled transaction

      Conveyancing department

    • "She has a substantial amount of empathy which she brings to any mediation and she works extremely hard to gain the trust of people. She fully understands how complex financial disputes work and is well versed in dealing with individuals of high net worth."

      Chambers HNW 2021

    Related InsightsVIEW ALL

    1. 25.4.2024

      A Guide to Asset Protection Trusts

      One good reason to place your assets into a trust is to protect family wealth without fearing for its future....

      Read more
    2. osbornes hampstead office

      What is a Mirror Will?

      Mirror wills are mirror images of each other and practically the same in every way. They suit couples, married or...

      Read more
    3. english countryside

      A Guide to Life Interest Trusts

      In today’s complex families, protecting assets for your children while ensuring that a surviving spouse can still enjoy them...

      Read more
    4. desk with flowers

      What is a discretionary trust?

      With a discretionary trust, there is no automatic right for beneficiaries to receive funds from the trust. Instead, the trustees...

      Read more
    5. night sky

      5 Things You Should Never Put in a Will

      When it comes to writing a will, you want to make sure that your wishes are known and that the...

      Read more
    6. Forged will pic

      Forged Wills

      If the contents of a will comes as a surprise, then one of the things to consider is whether the...

      Read more
    7. 14.2.2024

      What is Proprietary Estoppel?

      What is Estoppel? In general terms, estoppels operate where one party has acted on the basis of a statement made...

      Read more
    8. 14.2.2024

      Duties of Trustees

      What is a trustee? When someone sets up a trust, they will appoint trustees to manage the trust and its...

      Read more
    9. Deed of variation to a will

      Deed of Variation: Making a Change to an...

      What is a deed of variation? A deed of variation is a legal document which can be used to alter...

      Read more
    10. Constructive Trusts

      Constructive Trusts

      Property rights are not always clear-cut. Sometimes, a person who does not legally own a property could be entitled to...

      Read more
    11. osbornes law writing pad

      What is a Codicil?

      What is a codicil to a will? Life has a habit of changing and your will may need to change...

      Read more
    12. man looking at a lake

      Can Someone With Dementia Make A Will or...

      It’s a sad reality in an ageing population that more people than ever suffer from dementia in the UK....

      Read more
    13. waiting

      Can a Lasting Power of Attorney Be Challenged?

      The number of people recognising the importance of making a Lasting Power of Attorney (LPA) has risen dramatically in recent...

      Read more
    14. 10 tips

      Wills Disputes: The Duty To Account Is Not...

      Beneficiaries frequently ask us whether trustees or personal representatives can be required to provide a financial account. Their request may...

      Read more
    15. international map and money

      Will Dispute Case Law

      New Births And New Relationships? Review Your Will To Avoid A Dispute You’d imagine a wealthy businessman with assets...

      Read more
    16. older couple

      Of Bad Character: Undue Influence Claim Succeeds

      Naidoo v Barton: undue influence and the risks of mutual wills Can someone’s bad character be used to prove...

      Read more
    17. lady holding a cup

      Case Law: Dementia-Induced Mild Cognitive Impairment

      Dementia is a harsh reality for increasing numbers of families. Sadly, it means the disputed wills solicitors at Osbornes Law...

      Read more
    18. eu flags

      German Court Rules on EU Succession Regulation

      Succession laws vary from country to country which historically made the administration of cross-border estates potentially complex. Since 17 August 2015, the...

      Read more
    19. couple holding hands

      Are trusts protected from divorce?

      Can trusts protect an inheritance from your spouse? A trust is a separate legal entity. Neither spouse owns its assets....

      Read more
    20. the moon

      How to prevent someone contesting a will

      It is fairly rare in my experience for a parent to write a child out of their will but that...

      Read more
    21. primrose hill london

      Gifting Property to Children

      Can I gift property to my children? Gifting a property to your adult children is a relatively complex transaction but...

      Read more
    22. house in regents park london

      Contentious Probate Case Studies

      Contentious probate involving business assets Our contentious probate solicitors act for the defendants to a claim issued to pronounce in...

      Read more
    23. last will and testament disputes

      Contesting A Will Case Studies

      Will dispute on grounds of lack of capacity Our contesting a will solicitors acted for the claimants, the adult daughters...

      Read more
    24. Closeup of a hand signing

      Do you need to register your trust?

      The Trust Register was introduced in 2017 as part of anti-money laundering regulations. Previously, only trusts with a UK tax liability...

      Read more