A trust is a legal arrangement in which one person — known as the settlor — transfers ownership of assets to one or more trustees. Those trustees hold and manage the assets on behalf of specified beneficiaries, following the terms set out in a trust deed.
Once assets are placed into a trust, they are no longer owned personally by the settlor. Instead, the trustees become the legal owners, with a duty to act in the best interests of the beneficiaries in accordance with the trust deed.
Trusts have been used for centuries as part of estate planning and can involve a wide range of assets, from cash and investments to property and business interests.
Establishes the trust and transfers assets into it
Hold and manage the trust assets in line with the trust deed
Receive the benefit of the trust assets or income
Trusts can play a number of roles in estate planning. Whether a trust is appropriate depends on your individual circumstances, objectives and the nature of your assets.
A trust can provide a structured way to hold and manage assets, potentially offering a degree of protection in certain circumstances for future generations.
Trusts allow you to set out how and when assets are passed to beneficiaries, giving you a greater degree of control over the distribution of your estate.
Trusts can form part of a wider estate plan, working alongside other financial and legal arrangements to reflect your personal objectives and circumstances.
Whether providing for children, grandchildren or other loved ones, a trust can offer a flexible mechanism to support family members according to your wishes.
We help you select and structure the most appropriate trust based on your financial goals, family circumstances, and tax situation:
Simple and straightforward trust where the beneficiary has an immediate, absolute right to both capital and income once they reach age 18 (16 in Scotland).
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Highly flexible structure where trustees decide how and when assets are distributed to beneficiaries, offering maximum protection.
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Beneficiary has an automatic right to receive income generated by the trust (such as rent or dividends) during their lifetime, while capital passes to others later.
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Designed to reduce IHT liability while providing the settlor with a guaranteed, regular income for life from the transferred assets.
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Allows you to lend money to a trust so that future growth accrues outside your taxable estate, while you retain access to the original capital.
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Speeds up payout of life policies or investments directly to beneficiaries on death, avoiding delays caused by probate.
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Created within your Will to protect property, such as your family home, ensuring it passes to children while giving a surviving spouse life interest.
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Combines features of discretionary and interest in possession trusts to adjust as family needs or tax laws evolve over time.
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A specialist planning arrangement for those with surplus income that may qualify under the normal expenditure out of income exemption, allowing regular gifts to potentially fall outside the estate immediately.
Read MoreThere is no single trust that is appropriate for everyone. Suitability depends on a range of factors, including your individual circumstances, your objectives, the nature and value of the assets involved, and how you intend the trust to operate.
Each type of trust carries its own rules regarding how assets are held, who benefits, and how the arrangement is taxed. Taking professional advice before establishing any trust is essential to ensure the structure reflects your goals and complies with current legislation.
Trusts can play a powerful role in Inheritance Tax (IHT) planning. Depending on the trust type and how it is structured, transferring assets into trust can immediately or gradually remove them from your estate for tax purposes after 7 years.
However, trust tax rules can be intricate—involving periodic 10-year charges and exit charges for certain discretionary trusts. We ensure your trust structure achieves maximum tax efficiency while strictly adhering to HMRC guidelines.
Speak to an Estate Planning SpecialistA Will only takes effect after your death and must pass through probate before assets are distributed. A trust takes effect as soon as created (or upon death) and allows ongoing, immediate management of assets without probate delays.
Not necessarily. In many trust structures (such as lifetime trusts), you can act as a trustee yourself, giving you ongoing control over how the trust assets are managed, invested, and distributed.
Trust taxation depends on the trust type. Bare trusts tax income/gains directly on the beneficiary, while discretionary trusts are subject to trust rate income tax, capital gains tax, and potential 10-year periodic or exit charges.
Revocable trusts allow changes, whereas irrevocable trusts cannot easily be altered once established. However, discretionary trusts give trustees built-in flexibility to adapt distributions to changing beneficiary circumstances.
Costs depend on the complexity of the trust structure, asset types, and legal requirements. We provide transparent upfront quotes during your free initial consultation.
Speak to Wealth Genius about your circumstances and objectives.
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