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Simply EstateEstate Planning

Free tool · England & Wales

Which type of trust do you actually need — if any?

Pick your goal and compare the main UK trust types side by side — including what each one honestly cannot do, and when no trust is needed at all. No sign-up, no obligation.

Your goal

What are you actually trying to protect? Pick the one closest to your situation.

General guidance, not advice. Whether any trust is right for you depends on your circumstances — and we will tell you plainly if one is not. Trusts have their own legal duties and tax rules, and no trust is a way to simply avoid care fees or Inheritance Tax. Wills, LPAs and trusts are not regulated by the FCA.

Bare trust

What it does

The simplest form of trust: assets are held in a trustee's name, but the beneficiary is fixed and owns them outright in law. Once the beneficiary turns 18 (in England and Wales) they can demand the assets.

  • Holding money or investments for a child or grandchild
  • Keeping ownership simple and transparent
  • Gifts that are treated as the beneficiary's own for tax

What it doesn’t do

  • Give you any control after the beneficiary turns 18 — they can take everything at that point
  • Let you change who benefits later, even if circumstances change
  • Protect the assets from the beneficiary's own divorce, debts or poor decisions

Typical use

A grandparent setting money aside for a grandchild where simplicity matters more than control.

What to know about tax & costs+
  • Assets count as the beneficiary's own for tax and means-testing — and they can take full control at 18.

Discretionary trust

What it does

Trustees hold assets for a class of possible beneficiaries and decide who receives what, and when. No beneficiary has a fixed right to anything — the trustees exercise judgement, usually guided by your letter of wishes.

  • Staged or conditional inheritance rather than a lump sum at 18
  • Protecting a vulnerable or disabled beneficiary's means-tested benefits
  • Flexibility when family circumstances may change
  • Keeping assets out of a beneficiary's own estate or divorce settlement

What it doesn’t do

  • Automatically save Inheritance Tax — discretionary trusts have their own tax regime, including possible entry, ten-year and exit charges
  • Give beneficiaries certainty — they depend on the trustees' decisions
  • Run itself — trustees have real legal duties, record-keeping and tax filings

Typical use

Parents who want money to reach children or grandchildren gradually, on the trustees' judgement, rather than outright at 18.

What to know about tax & costs+
  • Transfers into the trust above your available nil-rate band face a 20% lifetime charge.
  • The trust can face charges of up to 6% every 10 years, and exit charges when assets leave.
  • Trust income is taxed at the trust rates.

Life interest trust (interest in possession)

What it does

One person (often a surviving spouse or partner) has the right to the income from the trust — or to live in a property — for life. When they die, the capital passes to the final beneficiaries you chose, typically your children.

  • Providing for a surviving partner without disinheriting your children
  • Second marriages and blended families — both sides are protected
  • Making sure the capital ultimately goes where you intended

What it doesn’t do

  • Give the life tenant access to the capital — they receive the income or use of the asset, not the underlying funds
  • Remove the assets from Inheritance Tax altogether — the trust fund is usually treated as part of the life tenant's estate on their death
  • Suit families who want full flexibility — the structure is deliberately fixed

Typical use

A second marriage: the survivor keeps the home or income for life, and the capital then passes to each side's own children.

What to know about tax & costs+
  • The life tenant is usually treated as owning the assets for Inheritance Tax.
  • Ongoing trustee duties and accounts are real work.

Property protection trust (in a will)

What it does

A will trust covering your share of the family home. On the first death, that share passes into trust rather than outright to the survivor, who keeps the right to live there. Your share is then earmarked for your chosen beneficiaries.

  • Ring-fencing the first-to-die's share of the home for the children
  • Protecting that share if the survivor later remarries or rewrites their will
  • Limiting how much of the home's value could be assessed if the survivor later needs care

What it doesn’t do

  • Avoid care fees — only the deceased's share is protected, and only because it never belonged to the survivor; the survivor's own share remains fully assessable
  • Work as a lifetime 'give the house away' scheme — deliberate deprivation rules let local authorities look through transfers made to dodge care fees, with no time limit
  • Help at all if both of you eventually need care, or if the survivor needs care before the first death

Typical use

A couple who own their home as tenants in common and want the first-to-die's half secured for the children, whatever happens later.

What to know about tax & costs+
  • Only comes into effect on death, via your will.
  • Deliberate-deprivation rules still apply to care-fee outcomes.
  • The survivor's occupation rights need careful drafting.

Disabled person's trust (vulnerable beneficiary)

What it does

Trustees hold assets for a disabled or vulnerable person, with special tax treatment, so financial support can be provided without disqualifying means-tested benefits. The favourable treatment only applies where the beneficiary meets the statutory definition of a disabled person.

  • Protecting a vulnerable beneficiary's means-tested benefits
  • Long-term care and support of a vulnerable beneficiary
  • More favourable tax treatment than a standard discretionary trust

What it doesn’t do

  • Work as a general asset-protection vehicle — its purpose is the beneficiary's welfare, not sheltering family wealth
  • Apply automatically — the qualifying conditions are strict, and the beneficiary must meet the statutory definition
  • Run itself — keeping the special treatment takes ongoing trustee work, records and tax compliance

Typical use

Parents providing for a disabled child beyond their own lifetimes.

What to know about tax & costs+
  • Special tax treatment depends on the beneficiary meeting the statutory definition.
  • Get the qualifying conditions checked before relying on it.

No trust may be needed

What it does

Honestly: many families do not need a trust at all. A well-drafted will, the spouse exemption, the nil-rate bands, lifetime gifting and pension nominations often achieve the goal with less cost and complexity.

  • Straightforward estates passing to a spouse and then adult children
  • Avoiding ongoing trustee duties, accounts and trust tax returns
  • Keeping the plan simple enough that everyone understands it

What it doesn’t do

  • Control what happens after your death beyond what your will says — outright gifts are outright
  • Protect an inheritance from a beneficiary's divorce, creditors or means-tested benefits assessments
  • Help where you genuinely need conditions, staged payments or a vulnerable beneficiary safeguarded

Typical use

A married couple with adult, financially stable children and no second-family complications — a good will does the job.

What to know about tax & costs+
  • Simpler routes — a well-drafted will, death-benefit nominations and joint-ownership choices — often achieve the goal without trust running costs.

How to choose between trust types

The honest starting point is the goal, not the trust. A bare trust suits simple gifts to children or grandchildren but hands everything over at 18. A discretionary trust keeps money under trustee judgement — useful for staged inheritance and for protecting a vulnerable beneficiary’s means-tested benefits — at the cost of real trustee duties and its own tax regime. A life interest trust protects both a surviving partner and the children’s ultimate inheritance, which is why it is the standard answer for second marriages and blended families.

And sometimes the right answer is no trust at all. The spouse exemption, the nil-rate bands, lifetime gifting and a well-drafted will achieve many families’ goals without ongoing trustee duties or trust tax returns. On care fees in particular, be wary of anyone selling certainty: deliberate deprivation rules mean a trust is not a way to simply escape care costs, and what can legitimately be protected is narrower than the marketing suggests.

For how we set trusts up — and when we advise against them — see our trusts service.

Trust comparison: common questions

What types of trusts are there in the UK?+

The main families are: bare trusts (the beneficiary is fixed and takes outright at 18), discretionary trusts (trustees decide who receives what and when, guided by your letter of wishes), life interest trusts (one person — often a surviving spouse — has the income or use of an asset for life, with the capital then passing to others), and will trusts such as a property protection trust covering your share of the family home. Each does a different job, and plenty of families need none of them — a well-drafted will often achieves the goal with less cost and complexity.

Do trusts avoid Inheritance Tax?+

Not automatically, and anyone who says otherwise is overselling. Some trusts can reduce Inheritance Tax in the right circumstances — for example, assets settled in your lifetime can leave your estate if you survive seven years — but discretionary trusts have their own tax regime (possible entry, ten-year and exit charges), and a life interest trust fund usually still counts in the life tenant's estate. Whether a trust helps depends entirely on your numbers, timing and goals.

Can a trust protect my home from care fees?+

Only in a limited, honest sense — a trust is not a loophole. If you give your home away or put it in trust to escape care costs, deliberate deprivation rules let the local authority treat you as still owning it, with no time limit; timing and intent matter. What a property protection trust in a will can legitimately do is ring-fence the first-to-die's share of the home for the children, because that share never belonged to the survivor. The survivor's own assets remain fully assessable.

What does setting up a trust cost?+

It depends on the type of trust and how it fits into your wider estate plan, so we don't quote a one-size-fits-all figure. What we can promise is how we charge: a fixed fee agreed up front before any work starts, with no hourly billing and no surprises. The initial consultation is free, and if a trust isn't worth the cost in your situation, we'll say so.

Do I need a solicitor to set up a trust?+

There is no legal requirement to use a solicitor, but trusts are technical documents with real consequences — trustee duties, tax registration and reporting, and interactions with your will. A badly drafted trust can be worse than none. They should be prepared by a professional who specialises in estate planning, and we'd encourage you to ask any provider exactly who drafts the documents and what ongoing support is included.

What is the difference between a trust and a will?+

A will says who inherits when you die; everything passes outright unless it says otherwise. A trust adds a layer of control — assets are held by trustees for beneficiaries on terms you set, which can apply during your lifetime or be created by your will. Most people need a will; only some also need a trust. The right starting question is what you're trying to protect, which is exactly what the comparator above asks.

What is a disabled person's trust?+

A disabled person's trust — sometimes called a vulnerable beneficiary trust — is one where trustees hold assets for someone who meets the statutory definition of a disabled or vulnerable person. It carries special tax treatment compared with a standard discretionary trust, and because the assets sit outside the beneficiary's own name, financial support can be provided without disqualifying means-tested benefits. The qualifying conditions are strict and depend on the beneficiary's circumstances, so they need checking before anyone relies on the favourable treatment. It is not a general asset-protection vehicle: its purpose is the long-term welfare of the beneficiary — most often a disabled child whose parents are planning beyond their own lifetimes.

What tax do discretionary trusts pay?+

Three Inheritance Tax charges matter. On entry, transfers into the trust above your available nil-rate band face a 20% lifetime charge. Periodically, every 10 years the trust can face a charge of up to 6% of the value above the nil-rate band. And on exit, a charge can apply when assets leave the trust, broadly pro-rated from the last ten-year charge. On top of that, trust income is taxed at the trust rates, which are higher than most individuals pay. None of this makes a discretionary trust a bad idea — it means the tax regime is part of the decision, and the control and protection have to be worth it.

Do I always need a trust?+

No — and a comparison tool that pretended otherwise would not be worth much. Simpler routes — a well-drafted will, death-benefit nominations on pensions and life policies, and joint-ownership choices — often achieve the goal without trust running costs, trustee duties or trust tax returns. Trusts earn their keep where you genuinely need ongoing control, a vulnerable beneficiary safeguarded, or both sides of a blended family protected. That is why 'no trust may be needed' is one of the cards above, and why we will say plainly if it is the right answer for you.

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