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Will trusts explained
A will trust lets you leave assets to your beneficiaries while placing conditions or protections around how and when they receive them. This guide explains what will trusts are, the different types, and when they might be appropriate for your situation.
Key takeaways
A will trust is created by your will and only comes into effect when you die
It allows you to leave assets to beneficiaries while controlling how and when they receive them
Most people with straightforward estates do not need a will trust
Trusts are most useful for blended families, young or vulnerable beneficiaries, and certain inheritance tax situations
If you think a trust might be relevant, speak to our team before you start your will
What is a will trust?
A will trust — sometimes called a testamentary trust — is a trust that is created by your will and only comes into effect when you die. Unlike a lifetime trust (which you set up while you are alive), a will trust is written into the terms of your will and activates on your death.
In simple terms, a trust is a legal arrangement where assets are held by one party — the trustee — for the benefit of another party — the beneficiary. Rather than passing your assets directly and immediately to a beneficiary, a trust allows you to place conditions, timing, or protections around how those assets are managed and distributed.
A will trust does not prevent your beneficiaries from eventually receiving your assets. It simply controls how and when they do — and, in some cases, provides important protections along the way.
How a will trust works in practice
When a will trust comes into effect, the assets concerned do not pass directly to the beneficiaries. Instead, they are held by the trustees — people you have named in your will — who manage and distribute them in accordance with the terms of the trust.
The trustees have a legal duty to act in the best interests of the beneficiaries. They must follow the terms set out in the trust, keep accurate records, and act impartially where there are multiple beneficiaries.
The trust continues until the conditions you have set are met — for example, until a child reaches a specified age — at which point the assets are distributed and the trust comes to an end.
Types of will trust
Bare trust (absolute trust)
The simplest type of trust. The beneficiary has an absolute, immediate right to the assets — but the trustee holds them until the beneficiary reaches a specified age (usually 18). Commonly used for children who are too young to receive assets immediately.
Discretionary trust
The trustees have discretion over how to distribute income and capital among a defined class of beneficiaries — such as children and grandchildren. No single beneficiary has an automatic right to anything. The trustees use their judgement about who needs what and when. Useful when you want flexibility to respond to changing circumstances among your beneficiaries.
Life interest trust (interest in possession trust)
One beneficiary — the life tenant — receives the income from the trust assets during their lifetime (or for a specified period), but does not own the underlying capital. When they die (or the period ends), the capital passes to other beneficiaries — the remaindermen. Commonly used to provide for a surviving spouse while protecting assets for children from a previous relationship.
Vulnerable beneficiary trust
Designed specifically for beneficiaries who have a disability or are otherwise vulnerable. Assets are held in trust and managed by trustees on the beneficiary’s behalf, with the aim of protecting their long-term welfare. These trusts may qualify for special tax treatment.
When a will trust might be useful
Will trusts are not necessary for most straightforward estates. They tend to be worth considering in a number of specific situations:
You have children from a previous relationship— a life interest trust can provide for a surviving spouse while ensuring children from a previous relationship ultimately inherit the assets you intended for them
Your children are young— a trust can hold assets until children reach an age where they are better placed to manage an inheritance (e.g. 21 or 25 rather than 18)
You have a vulnerable beneficiary— a trust can protect assets for a beneficiary who has a disability, mental health condition, or who might be at risk of financial exploitation
You are concerned about care home fees— in certain circumstances, assets held in a trust may be treated differently in local authority means-testing assessments, though professional advice is strongly recommended here as the rules are complex
Inheritance tax planning— some types of trust can form part of a broader strategy to reduce inheritance tax, though again this is an area where specialist advice is essential
A beneficiary has creditor or relationship risks— if a beneficiary is in financial difficulty or in an unstable relationship, placing assets in a trust rather than leaving them outright can provide some protection
Appointing trustees
Your trustees are the people who will manage the trust assets after your death. The qualities to look for are similar to those for executors — trustworthiness, organisational ability, and good judgement. You can appoint the same people as both executors and trustees, or different people for each role.
Most people appoint two trustees. There is no legal maximum, but having too many trustees can make decision-making slow and complicated. Trustees must generally act unanimously unless the trust document provides otherwise.
Practical tip: Consider whether your trustees are likely to outlive you by a significant margin, and whether they have the time and organisational capacity to manage trust assets, potentially for many years, in the event of a long-running trust.
Will trusts and inheritance tax
The inheritance tax treatment of will trusts is a complex area that has changed significantly over the years. The tax consequences depend on the type of trust, the value of the assets, and individual circumstances. It is an area where specialist professional advice is strongly recommended before you make any decisions.
Some key points to be aware of:
Assets passing into certain types of trust may be subject to inheritance tax at the point of death
Discretionary trusts are subject to ten-year anniversary charges and exit charges when assets leave the trust
Some trusts qualify for the spouse or civil partner exemption, or the nil rate band
Leaving 10% or more of your net estate to charity can reduce the inheritance tax rate on the remainder from 40% to 36%
Inheritance tax planning is an area where the rules are intricate and the consequences of getting things wrong can be significant. If this is a concern for your estate, we strongly recommend taking specialist advice before proceeding.
Do I need a will trust?
For most people with a straightforward estate — a home, savings, and a wish to leave everything to a spouse or partner and then to children — a simple will without a trust is usually sufficient.
A will trust is most likely to be relevant if any of the following apply to you:
You have children from a previous relationship
You have a beneficiary who is under 18 and stands to inherit a significant amount
You have a beneficiary who is vulnerable or has a disability
Your estate is large enough that inheritance tax is a consideration
You are concerned about a beneficiary's financial decisions or circumstances
If you are unsure whether a trust is appropriate for your situation, the best approach is to have a conversation with us before you start writing your will. We can help you work out whether a trust is needed and, if so, what type would be most suitable.
Frequently asked questions
How much does it cost to set up a will trust?
Including a trust in your will typically adds complexity and may affect the cost of drafting the will, depending on the type of trust and your specific circumstances. Our team can advise you on cost when you discuss your situation with us.
Can I set up a trust without a solicitor?
Simple trusts — such as a bare trust for children — can be included in an online will. More complex trust arrangements are generally best handled with specialist legal advice to ensure they are correctly drafted and achieve the intended outcome.
What happens if my trustee dies?
If a trustee dies, the remaining trustees can continue to act. If there is only one trustee remaining, it is generally advisable to appoint an additional trustee. Your will can include provisions for the appointment of replacement trustees.
Can a trust be changed after I die?
The terms of a will trust are generally fixed at the point your will comes into effect. However, trustees may have certain powers to vary the trust, and beneficiaries who are all adults and have full legal capacity may be able to collapse or vary a trust under the rule in Saunders v Vautier. Professional advice is recommended before attempting to vary a trust.
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Not sure if you need a trust? We can help.
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