A Trust in your Will is a legal instrument that lets you leave a gift of money or property to your Beneficiaries in a way that keeps some control, after your death, over who inherits and when. You do this by giving your Trustees (the people you appoint to look after, and ultimately distribute, those gifts after your death) guidance in a written instruction, known as an Expression of Wish or Letter of Wishes. The Trustees look after the assets held under the Trust arrangement according to the rules you set. Because the Trust only takes effect when you die, you keep full control over those assets during your lifetime, as with anything else you own.
Key Takeaways
- A Will Trust only starts when you die. Until then, everything stays yours to use, sell or do whatever you want with.
- A Protective Property Trust makes sure your share of your home can always pass to your own children or family, while your partner can carry on living there. It's especially useful for blended families. It's designed to protect against what we call "hostile" creditors, for example your widow's or widower's new spouse's children.
- A Vulnerable Person's Trust provides for a beneficiary who perhaps can't manage their own money, or who relies on means-tested benefits, without them losing that support.
- A Discretionary Trust lets your Trustees decide who benefits and when, for your whole estate or for specific gifts.
- Every Trust should come with a detailed letter of wishes, explaining to your Trustees the purpose of the Trust and what you intend it to achieve.
- Lifetime Trusts, where you give your home or assets away now, are a very different thing. Always get a written schedule of every future charge before you sign.
This guide covers Wills made under the law of England and Wales. Scotland and Northern Ireland have their own rules.
What is a Trust in a Will?
When a Trust is written into your Will, it's often called a Testamentary Will Trust. Your Executors usually act as the Trustees too, so you're often choosing the same trusted people for both jobs. Whoever you choose, your Trustees must act in the beneficiaries' best interests. And because the Trust is created by your Will, you can change or remove it simply by making a new Will, right up until your death.
Most people's Wills don't need a Trust at all. But there are a few situations where a Trust does a job that a simple gift can't, and these are the ones we're asked about most often.
| Trust | Who it's for | What it does |
|---|---|---|
| Protective Property Trust | Married or cohabiting couples, mixed or same sex, and "blended" families | Protects your home against "hostile" creditors. Your spouse or partner can carry on living in your home for the rest of their life, or for a set number of years, while the Trust makes sure your share of the property, whether all or part of it, ultimately passes to your children or other chosen beneficiaries |
| Vulnerable Person's Trust | A beneficiary who is disabled, unwell or can't manage money | The Trustees look after the legacy for the vulnerable beneficiary. During the beneficiary's lifetime, the Trustees can pay them capital or income as they see fit, but because the Trust is effectively discretionary, the legacy won't affect their means-tested benefits |
| Discretionary Trust | Anyone who wants flexibility | Trustees decide which beneficiaries receive what, and when |
Protective Property Trusts: protecting your children's inheritance
A Protective Property Trust can be used by any couple, married or cohabiting, mixed or same sex. On the first death, that person's share of the home, whether all of it or part of it, goes into a Trust rather than straight to the survivor. The survivor can carry on living there for the rest of their life, or for a set number of years. When they die, or the Trust ends, that share passes to the people chosen by the first partner, usually their own children.
Why blended families need one
This comes up far more often than people expect. Picture a couple who have both been married before and each have children of their own. They pool their money to buy a home together, and own it as joint tenants, which is the usual way couples own property.
With a joint tenancy, the whole house passes automatically to the survivor on the first death, whatever either of their Wills says. The survivor then owns all of it. They may, quite naturally, leave it all to their own children. Or they may remarry, and marriage cancels an existing Will (Wills Act 1837, section 18), so the new spouse's family may end up inheriting. Either way, the first partner's children can be left with nothing, even though their parent paid towards the home.
Severing the joint tenancy comes first
A Protective Property Trust can only work if each of you owns a separate share that your Will can deal with. So the first step is usually to sever the joint tenancy, which means changing how you own the home so that you become tenants in common.
In plain English: as joint tenants, you both own the whole house together. As tenants in common, you each own your own share, normally half each, and you can each leave your share to whoever you choose. Severing the tenancy is done by giving written notice to the other owner, then recording the change with HM Land Registry. Nothing changes day to day: you still both live there and you can still sell it together. Our guide to joint tenants or tenants in common explains the difference in more detail.
You don't have to work this out on your own. When we draft a Protective Property Trust in your Will, we carry out HM Land Registry searches to establish exactly how your property is owned. If the joint tenancy needs severing, we produce the severance documents for you, tailored to your property and already completed, ready for you to sign and send to the Land Registry.
Life Interest or Right to Reside?
A Protective Property Trust can be set up in one of two main ways:
- A Life Interest Trust gives the survivor a wide benefit, with a right to live in the property for the rest of their life. The home can be sold to downsize if the survivor wishes, with the Trustees' agreement, and in that event the survivor can receive any income the Trust's share produces.
- A Right to Reside Trust gives the survivor the right to carry on living in the home for a specific period of time. The Trust usually applies only to that specific residence. With this type of Trust you can specify the circumstances in which the right to occupy should end. It could be after a specified number of years, or if the survivor marries or remarries, cohabits, or stops using the property as their main residence. When the Trust ends, the property passes to the ultimate beneficiaries.
In both cases, the survivor can't sell or give away the share held in Trust. When the Trust ends, that share passes to the beneficiaries named in the first partner's Will. Because the share doesn't belong to the survivor, it also can't be claimed by their creditors if they get into financial difficulty.
When the home is in one partner's name
A Protective Property Trust isn't only for couples who own their home jointly. Say a man owns his house in his sole name, and his new partner moves in with him. He wants his partner to have a secure home if he dies first, but he also wants the house to go to his own children eventually.
He can include a Right to Reside Trust in his Will. This lets his surviving partner live in the house for a fixed number of years, or for the rest of their life. The Trust can also include conditions that end it early, for example if the surviving partner:
- stops using the property as their main home,
- cohabits with a new partner, or
- marries or forms a civil partnership.
If any of these happens, the Trust ends, the house is sold and the money passes to his children or other beneficiaries named in his Will. His partner has a home for as long as they need it, and his children's inheritance is protected. Because he already owns the whole house, there's no joint tenancy to sever.
People sometimes ask whether this kind of Trust helps with care fees. The rules on this are complex and depend on your circumstances, so it's something we'd talk through with you rather than promise in a guide. The main purpose is to protect your children's inheritance.
Mortgaged properties
If your home is mortgaged, it's vitally important to make sure the mortgage would be paid off completely in the event of your death. With a mortgaged property, you should always consult a financial adviser to make sure enough life assurance is in place to cover the outstanding debt.
Vulnerable Person's Trusts: providing for someone who needs support
A Vulnerable Person's Trust (formerly referred to as a Disabled Person's Trust) is for a beneficiary who might struggle if they inherited money outright. That might be an adult child with a disability or long-term illness, someone who can't manage money, or someone who could be taken advantage of.
Leaving money directly to someone who receives means-tested benefits, such as Universal Credit, can reduce or stop those benefits once their savings go over certain limits. A large inheritance could leave them no better off, or even worse off, until the money runs out. It could also be spent quickly, or end up controlled by someone who doesn't have their best interests at heart.
With a Vulnerable Person's Trust, your Trustees hold the money and use it for the beneficiary's benefit: perhaps paying for holidays, equipment, home adaptations or extra care. Because the beneficiary doesn't own the money themselves, it usually isn't counted against their benefits. Your letter of wishes (see below) is especially important here, explaining how you'd like your loved one to be looked after. Some Trusts of this kind can also qualify for special tax treatment, which we can explain.
Discretionary Trusts: flexibility for your estate or specific gifts
A Discretionary Trust gives your Trustees the power to decide which of a group of beneficiaries you've named receives what, and when. You can use one for the residue of your estate (everything left after debts, expenses and specific gifts), or for a specific gift, such as a sum of money or a property.
Discretionary Trusts can be useful when:
- Your beneficiaries are young, and you'd rather they didn't receive a large sum the day they turn 18.
- A beneficiary is going through a divorce, or has debts, and money left to them outright could be lost.
- You can't predict the future, and want your Trustees to be able to respond to circumstances, such as one child needing more help than another.
Your letter of wishes (see below) tells your Trustees how you'd like them to use their discretion. Discretionary Trusts have their own tax and reporting rules, including registering with HMRC's Trust Registration Service in some cases. We can explain how these would apply to your Will.
Choosing your Trustees
Your Trustees will be managing your family's inheritance, possibly for many years, so choose them carefully. Appoint at least two, because two Trustees are needed to sell a property held in Trust. Many people choose the same people as their Executors: trusted family members or friends who'll get on with each other and with the beneficiaries.
For a Protective Property Trust, it's common to have at least one Trustee who represents the children's interests alongside the surviving partner. The Trustees of a Will Trust are people you've chosen yourself, and you can change them whenever you update your Will.
Your letter of wishes
Every Trust should be accompanied by a detailed letter of wishes. This is a letter from you, as the testator (the person making the Will), to your Trustees. It explains the purpose of the Trust and what you intend it to achieve: for example, that your share of the home is there to give your partner security while protecting your children's inheritance, or how you'd like a vulnerable son or daughter to be supported.
A letter of wishes isn't legally binding, and it's kept separate from your Will, so it stays private and you can update it at any time without changing your Will. But it gives your Trustees clear guidance, possibly many years after you've gone, and good Trustees will follow it. Without one, they're left to guess what you would have wanted. Our Will system helps you prepare your letter of wishes alongside your Trust Will, and we're more than happy to explain anything or help further if you'd like us to.
A word about Lifetime Trusts
Lifetime Trusts, which we occasionally hear about, are very different from Trusts in a Will. Instead of leaving your home in Trust when you die, you give it away during your lifetime, often along with other possessions, into a Trust for your children now, while you're still alive and living there. They're sometimes sold as a way to make sure your children won't face probate delays, because the home is no longer part of your estate when you die.
They're often promoted at free seminars held at a local hotel or community venue, following invitations sent through the post. The pitch is usually an upfront fee of around £3,000 to £5,000, with "no ongoing charges". That can be technically true while you're alive, because the Trust holds nothing but the deeds to your home.
What isn't always made clear is what happens after your death. Someone has to manage the Trust after the second death, and the firm selling the Trust often appoints itself, or a connected company, as a Trustee. When the time comes to sell the house and wind up the Trust, the Trustees may instruct a solicitor of their choosing, and the fees for that work are paid out of the Trust or the estate.
In our experience, families can then face charges on top of charges, and because the people approving the bills are the same people who appointed the solicitor, there's little independent check on them.
If you're considering a Lifetime Trust, these questions are worth asking before you sign anything:
- Who will the Trustees be, and can you choose your own family as Trustees instead?
- Can your family remove and replace the Trustees later?
- Will you get a written schedule of every charge that could be made after your death, including Trustee fees, solicitor's fees and the cost of selling the house? If a firm can't or won't give you one, that tells you something.
There's one more point that's easy to overlook. Once your home is in the Trust, it no longer belongs to you, so you can't sell it to pay for your own care if you need it later in life. The value of your home is often what gives people a real choice of care home. Without it, your options may be limited to whatever else is available, and that can make a real difference to the comfort and quality of your later years.
For the avoidance of all doubt, this is not the kind of Trust that Downloadawill would ever recommend you get involved with. "Buyer beware" is the phrase we would use!
Frequently asked questions
Does a Trust in a Will cost anything to run while I'm alive?
No. A Will Trust doesn't come into existence until you die. With family members as your Trustees, and no income-producing assets held in the Trust, there shouldn't be any ongoing charges after your death either. For example, if the home is later sold to downsize, any spare money can be loaned back to the survivor. The Trust wording in your Will is designed to give your Trustees the widest possible range of options. If you choose professional Trustees, they will charge for the work they do. Everyone's situation is different, so professional tax advice should always be sought. During your lifetime, any Trust in your Will can be removed or amended, simply by making a new Will.
Do we need to sever our joint tenancy for a Protective Property Trust?
Usually, yes. If you own your home as joint tenants, it passes automatically to the survivor whatever your Wills say. Severing the joint tenancy, so that you own it as tenants in common, gives each of you a share that your Will can leave into Trust. When we draft a Protective Property Trust, we check how your home is owned with HM Land Registry and prepare the completed severance documents for you to sign and send.
Can my partner still sell the house if it's in a Protective Property Trust?
The home can usually still be sold, for example to move somewhere smaller, but the Trustees must agree, and the Trust's share of the money stays protected. Depending on how the Trust is written, it can be used to buy the survivor a new home.
What's the difference between a Right to Reside Trust and a Life Interest Trust?
A Right to Reside Trust lets the survivor live in the home. A Life Interest Trust gives them a wider benefit, including any income the Trust's share produces. Both keep the share itself safe for the beneficiaries named in your Will.
Is a Lifetime Trust the same as a Trust in my Will?
No. A Lifetime Trust takes effect straight away, and you give your home away while you're alive. A Trust in your Will only starts when you die, and you keep full ownership until then.
The short version: is a Trust right for you?
If you're in a blended family, have a loved one who needs extra support, or want your estate handled flexibly, a Trust in your Will may be worth considering. Every family's situation is different, which is why we treat Trust Wills as a bespoke service. Contact the Will Team for a no-pressure chat about your situation. If a straightforward Will is all you need, see how much a Will costs.
About this guide
This guide was written and checked by the Downloadawill Will Team. It explains how Trusts in Wills work in general terms and isn't legal, tax or financial advice for your own situation. Downloadawill is a trading style of Direct Wills. All our Will Writers are Members of The Society of Will Writers. We've been writing Wills for people in England and Wales since 1997. Read more about us.
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