In a recent report, it was revealed that in 2025, 36.2% of wills contained trusts. Trusts are on the increase, as families become more complex, with different blended arrangements, wills increasingly include business or agricultural assets, and as people live longer.

What is a trust?

Put simply, a trust involves one or more people (a trustee or trustees) holding assets for the owner or owners of those assets (a beneficiary or beneficiaries). Contrary to popular belief, trustees and beneficiaries can often be the same people.

Different types of trust

Trusts can be relatively straightforward – for example, a trustee holding an asset for a beneficiary who can ask for the asset to be transferred to them at any time (called a Bare Trust).

Some trusts provide for an individual beneficiary to enjoy the use of assets for their lifetime without that beneficiary owning those assets (called a Life Interest Trust).

There can be other trust arrangements where there may be numerous beneficiaries and the trustees have a right to decide which of the beneficiaries receive provision from the trust from time to time (called Discretionary Trusts).

Trusts can be useful

Here is a list of some of the circumstances where trusts may be appropriate:

• Where the beneficiary is at risk of financial claims arising from the breakdown of a relationship or as a result of bankruptcy or business failure. Trusts can be used to reduce the risk of third parties having a claim on the assets through their claim against the beneficiary.
• Where a beneficiary is disabled or in receipt of means-tested benefits and provision needs to be made for them in a manner which does not affect their entitlement to certain benefits or where their disability is such that they could not manage the assets themselves.
• Where a beneficiary is young or has poor money management skills. A trust could be used to ensure that the funds are made available to them for appropriate expenditure at an appropriate time.
• Where beneficiaries have significant wealth and giving them further assets outright will only increase that wealth. Trusts can allow assets to be held so that they are available for those beneficiaries, for example if their circumstances change, but in a manner in which the assets will not belong to the beneficiaries for inheritance tax purposes.
• As a tax mitigation strategy. Some charities have a trust-based legal structure.