Trusts are well known for their flexibility - think of them as the legal world’s Swiss Army knife. They can help with everything from safeguarding assets to planning for future generations.
This versatility and multiplicity – and a few myths as well – create mixed feelings about trusts. Some people come to us hoping they will be the answer to everything, when they may not be suitable. Others feel less sure, assuming they’ll be too complex when they would, in fact, be very useful and fitting for their circumstances.
Not just for the very wealthy
To give you an idea of trusts’ versatility for ‘everyday’ families, we’ve collated some examples of scenarios where they are often used. Everyone’s circumstances are unique, of course, so a trust will not always be the best solution in each scenario; equally, this is by no means a comprehensive list of their possible uses.
Providing for blended families
Let’s say you have remarried and share a home with your second spouse. You want to ensure they have a roof over their head if anything happens to you, but you also want the value of the house (or your share of it) to go to your children from a previous relationship.
In this case, a ‘liferent’ trust within your Will could provide the solution, ensuring your surviving partner has the benefit of the house that you share during their lifetime but ultimately, the equity passes to your children.
Retaining some control over assets
If you want to transfer assets to your children (before or after your death) but think they’re currently too vulnerable, young or irresponsible to have full control over those assets, a trust may provide the answers.
This is a way to give beneficiaries the ultimate benefit of the assets, but retain an element of control over their management. The trustees can have discretion as to how the assets and income are managed and distributed in favour of your selected beneficiaries, either indefinitely or for a fixed time.
Keeping things flexible
It is possible to put a mix of assets into a discretionary trust for your loved ones, rather than specifying who gets what in your Will. You specify the proportions you want each heir to inherit, and the trustees then allocate the assets in the most appropriate and tax-efficient way at the time of your death.
Therefore, if at the time you are making and reviewing your Will, there are various aspects to your affairs – perhaps both family and tax-related – that are uncertain, a discretionary trust in your Will may be appropriate.
Three simple tips
Those are just a taster of trusts’ possible uses, but with any arrangement involving a trust, there are some crucial considerations:
- Different types of trust are taxed differently and tax arrangements can change – do not assume they will avoid Inheritance Tax or other taxes.
- You are dependent on the trustees to deliver your wishes and comply with legal and HMRC requirements, so choose them wisely.
- Small errors in setting up a trust or using an unsuitable type of trust can thwart your intentions or lead to costly legal disputes: do consult an experienced private client solicitor.
The legal basics
In a nutshell, a trust is a legal arrangement or relationship for managing assets:
- The settlor gifts property, investments, cash or other assets into the trust - in their lifetime or in their Will
- The trustee or trustees manage those assets
- The beneficiary or beneficiaries benefit from the assets in the trust
Published 16 October 2025
