Let’s be honest – most people don’t think about trusts until someone suggests they should. Even then, the word sounds complex, maybe even a little intimidating. It brings to mind legal jargon, high-net-worth individuals, and the kind of estate planning that feels a bit….out of reach.
But here’s the reality: trusts are far more common and useful than many people realise. You don’t need to be incredibly wealthy to benefit from one. You just need to care about where your money goes, who gets it, and how it’s used when you’re no longer around to make those decisions yourself.
What Is a Trust, Really?
In simple terms, a trust is a way to pass on money or assets to others, while still having a say in how those assets are managed or used.
You, the person setting it up (called the settlor), hand over control of certain assets to someone you trust (the trustee), who then manages those assets for the benefit of someone else (the beneficiary). Sounds straightforward – and, at its heart, it is.
But what makes trusts so powerful is the flexibility they offer. Want to delay when your children receive their inheritance? You can. Need to protect assets for a vulnerable relative? A trust can help. Trying to keep your estate under the inheritance tax threshold? A trust can handle that too.
Why Bother with a Trust?
This is a question we hear often at Ward Goodman. And it’s fair.
People set up trusts for all kinds of reasons – not just to save tax. For some, it’s about control. For others, it’s about protection. And in many cases, it’s simply about doing what’s right for their family.
Here are a few examples:
- You want to leave money to your children, but you’re not sure they’re ready to handle it responsibly.
- A relative has a disability and you want to provide for them without affecting their access to means-tested benefits.
- You’d like to support a charity over time, rather than in one go.
- You want to make sure family assets stay within the family – even if your child later divorces.
The reasons vary, but the goal is usually the same: peace of mind. You want to know that what you’ve built won’t be lost, misused, or cause conflict later on.
Not All Trusts Are the Same
One of the more common misconceptions is that there’s just “a trust” – as if they’re all the same. They’re not. And which one suits you best depends on what you’re trying to achieve.
Discretionary trusts are popular when you want flexibility. You give your trustees the power to decide when and how beneficiaries receive money. That can be helpful if circumstances change – and let’s be honest, they often do.
Then there are bare trusts. These are simpler. The assets are held in someone else’s name (the trustee), but the beneficiary has the absolute right to them once they reach adulthood. Clean, but perhaps a bit rigid depending on your goals.
You might also come across interest in possession trusts. In these, one person gets income from the trust during their lifetime, while the underlying capital is passed to someone else later. This setup can work well in second marriages or when you’re trying to provide for different people at different stages.
There are others – including trusts designed for vulnerable people or bereaved minors – and each has its own rules, responsibilities, and tax implications. Which is why expert advice matters.
Control Without Chaos
Here’s something we hear a lot: “But won’t I lose control if I put money into a trust?”
It’s a valid concern. But no, you’re not giving up everything. In fact, many people find that trusts give them more control – not less.
You can set the rules. You can choose when and how funds are accessed. You can protect assets from future issues like divorce, bankruptcy, or irresponsible spending. And while you’ll need to choose trustees to carry out your wishes, that’s part of what makes the process work.
Choosing the Right Trustees
This part really matters. Your trustees are the ones who carry out the terms of the trust. They manage the money or property, make decisions, and ultimately ensure your wishes are followed.
So who should you choose? Some go with family. Others appoint professionals. Many pick a mix – someone they trust personally, and someone who understands the legal and financial side.
There’s no perfect answer, but you want people who are trustworthy, calm under pressure, and willing to ask for help when needed. Being a trustee isn’t just a formality. It’s a responsibility.
You Don’t Need Millions
Let’s clear up another myth while we’re here. You do not need to be wealthy to use a trust. Yes, high-net-worth individuals often use them, but they’re just as relevant for people who want to make sure their modest estate is handled well.
In fact, trusts are far more common than many people realise. According to HMRC’s latest figures, over 733,000 trusts and estates were registered and open on the Trust Registration Service as of August 2024. That’s a clear sign that trusts aren’t just a niche strategy – they’re a mainstream part of estate planning in the UK.
Whether it’s a family home, some savings, or a small portfolio – if you care about what happens to it, and want to avoid confusion or tax surprises, then a trust might be the right fit.
Where to Start
Setting up a trust can feel like a big step, and truthfully, it is. But it doesn’t have to be daunting.
The key is getting proper advice. Every family is different. Every estate has its quirks. At Ward Goodman, we’ve guided countless individuals and families through the process – helping them make clear, tax-efficient decisions that stand the test of time.
So if you’re thinking about using a trust, or just wondering if it’s the right move, have a conversation with us. We’ll help you make sense of your options and find a solution that works for your future.
