What is a Will Trust and why create one?

When considering estate planning, an often-overlooked tool which is renowned for its flexibility and protective benefits is the Will Trust.

A Will Trust can be a powerful mechanism to ensure your assets are managed and distributed according to your wishes after your death. Whether you’re safeguarding your family home, providing for vulnerable beneficiaries, or planning for tax efficiency, understanding how a Will Trust works is essential.

What is a Will Trust?

A Will Trust is a legal arrangement created within your will. Unlike a standard will that distributes assets directly to beneficiaries, a Will Trust appoints trustees to manage specific assets on behalf of beneficiaries. The Trust only comes into effect upon your death and after your will has been formally assented through probate.  

The person creating the Will (the testator) outlines the terms of the trust, including: 

• Who the trustees are. 
• Who the beneficiaries are. 
• Which assets are included; and 
• Any conditions or restrictions on how the assets are used or distributed 

Trustees have a fiduciary duty to act in the best interests of the beneficiaries and manage the trust assets responsibly. 

Types of Will Trusts

There are several types of will trusts, each suited to different aspects of estate planning:  

• Discretionary Trusts: Trustees have discretion in how and when beneficiaries receive a benefit from the trust. This is useful when a class of beneficiaries are nominated such as children or grandchildren of the testator, who each have varying needs or circumstances. 
• Life interest Trusts: A beneficiary (often a surviving spouse) has the right to use an asset or receive income from it during their lifetime. After their death, the asset passes to other beneficiaries, such as children. 
• Bare Trusts: Beneficiaries have an absolute right to the assets, typically used for minors who gain control at a specified age. 
• Contingent Trusts: Assets are only distributed if certain conditions are met, such as reaching a particular age or completing education. 

Key benefits of creating a Will Trust

1. Control over asset distribution

One of the key reasons for setting up a will trust is the ability to control how and when your assets are distributed. For example, you may wish for your children to inherit only after reaching a certain age or completing university. This prevents premature access to large sums of money and encourages responsible financial behaviour.  

2. Protection for vulnerable beneficiaries

Will trusts are ideal for protecting beneficiaries who may be financially inexperienced, disabled, or otherwise vulnerable. Trustees can manage the assets on their behalf, ensuring their needs are met without exposing them to financial risk or exploitation. 

3. Safeguarding the family home

Couples who own property as tenants in common often use will trusts to protect their share of the home. Upon the death of one partner, their share is placed in a trust, allowing the surviving partner to live in the home while preserving the inheritance for children. This can prevent sideways disinheritance, where assets unintentionally pass to a new spouse or their family. 

4. Mitigating long-term care costs

A Will Trust can help shield part of your estate from being assessed for care home fees. If your share of the family home is held in Trust, it may not be counted by the local authority when calculating your contribution to care costs. This is generally not considered deliberate deprivation of your assets under current UK tax rules.  

5. Managing the inheritance for blended families

Will Trusts offer significant benefits for blended families, where one or both partners have children from previous relationships. These arrangements can help ensure fairness, protect inheritances, and reduce the risk of unintended disinheritance.

In a blended family, a surviving spouse may unintentionally or intentionally exclude stepchildren from their Will. For example, if a wife leaves everything to her husband, he could later change his will to benefit only their mutual children or a new partner, leaving her children from a previous relationship with nothing 

A  Will Trust, particularly a life interest trust, allows the surviving spouse to benefit from assets (like living in the family home or receiving income) during their lifetime. After their death or remarriage, the assets pass to the children named in the Trust—ensuring that all children, including those from previous relationships, receive their intended inheritance.

Conclusion

Will Trusts can be complex and may have various income, capital and inheritance tax implications, including potential charges on trust assets and reporting requirements to HMRC. It is crucial to seek professional legal and tax advice before setting one up in your will, to ensure that this meets with your personal and financial requirements.

Creating a Will Trust is about more than just protecting wealth—it is about ensuring your legacy is handled with care, precision, and foresight. Whether you’re planning for young children, a blended family, or simply want more control over your estate, a Will Trust offers a structured and secure way to achieve your wishes.

By taking the time to understand and implement a Will Trust, you can provide peace of mind for yourself and lasting security for those you care about most.

If you wish to set up a Trust within your Will, please contact us and will be pleased to complete this for you.