When you plan your estate, a simple Will may not cover everything you want to achieve. For example, you may want to provide a home for your spouse while making sure your children inherit later, or you may want someone trusted to look after money for a young or vulnerable person. In these situations, you can include a trust in your Will. This guide explains the main types of Will trust, how they work, and how A.D.E. Wills can help.
What is a trust in a Will?
A trust in a Will is an arrangement that starts when you die. Instead of passing an asset straight to someone, your Will leaves it to trustees. The trustees then hold and manage it for the people you choose, called beneficiaries, on the terms set out in your Will.
Your trustees are often the same people as your executors, although they do not have to be. So it is worth choosing people who are organised, reliable and willing to take on the role, possibly for many years.
Why include a trust in your Will?
A Will trust can help you:
- hold money or property for children until they reach an age you choose
- provide for a vulnerable beneficiary without handing them large sums directly
- let a spouse or partner live in your home for life, while preserving its value for others
- give trustees flexibility to respond to changing family circumstances
Trusts can also have tax consequences, both when they are set up and while they run. These depend on the type of trust and your circumstances. We explain the general rules, but we do not give tax or financial advice. Where you need it, we can refer you to an appropriate professional.
Types of Will trust we can include
Life Interest Trust
A Life Interest Trust gives someone, often a spouse or partner, the right to benefit from an asset for the rest of their life. For example, they might live in the family home or receive the income from savings. When they die, the asset passes to the people you have chosen, such as your children.
Couples in second marriages or blended families often consider this type of trust, because it balances the needs of a surviving partner with those of children from an earlier relationship. For Inheritance Tax, the trust fund is usually treated as part of the life tenant’s estate when they die.
Discretionary Trust
With a Discretionary Trust, you name a group of possible beneficiaries, and your trustees decide who receives what, and when. This gives the trustees flexibility, for example if a beneficiary later divorces, gets into debt or needs extra support.
However, discretionary trusts fall under what is called the relevant property regime. This means the trust may face Inheritance Tax charges of up to 6% every ten years, and when assets leave the trust. The trustees may also need to register the trust with HMRC and file tax returns. So a discretionary trust is useful, but it is not always the right choice.
Vulnerable Beneficiary Trust
If someone you want to provide for is disabled or vulnerable, a Vulnerable Beneficiary Trust lets trustees manage their inheritance for them. Depending on how it is set up, it may also help protect their entitlement to means-tested benefits. We will talk through whether this type of trust fits your situation.
Letter of Wishes
A Letter of Wishes sits alongside your Will. It is not legally binding, but it guides your trustees on how you would like them to use their powers. We strongly recommend one with a discretionary trust, because it helps trustees understand what you had in mind.
How much does it cost to include a trust in your Will?
We charge a fixed fee for each trust, in addition to the cost of the Will itself:
- Life Interest Trust: £175
- Discretionary Trust: £225
- Vulnerable Beneficiary Trust: £225
- Letter of Wishes: £95
No VAT is charged. You can see the full list of fees on our Wills Pricing page.
How to request a trust in your Will
You do not need to decide in advance. First, we talk through your family, your property and what you want to achieve. Then, if a trust would genuinely help, we explain how it would work so you can make an informed choice. We only suggest a trust where it is relevant, and you are never under any pressure to include one.
You can make your Will in person, at your home or our Oxford office, or online by video appointment. Either way, you receive a personalised booklet explaining your draft Will clause by clause, including any trust, and you can ask for as many draft changes as you need.
For more about the wider picture, see our Estate Planning page or the GOV.UK guide to trusts and taxes.
Talk to us about Will trusts
If you are thinking about including a trust in your Will, Edward is happy to talk it through. Call 01865 507174 or email info@adewills.co.uk for a free, no-obligation initial chat.
