Trusts – an effective way to transfer wealth


Trusts can play an important role in helping families achieve their financial goals and provide an effective way of passing money down the generations.


A trust is a legal arrangement which allows assets, usually property, investments or money, to be looked after by a trustee for the good of one or more beneficiaries. Those beneficiaries can be named individuals, such as your children, or can be people who are yet to be born. Trusts can be set up during your lifetime or in conjunction with a Will and can be used for several purposes.


They can have a variety of uses such as:

  • Protecting the financial interests of a young beneficiary by retaining control of the assets until they reach the age of 18 (16 in Scotland)
  • Looking after the interests of somebody who can’t handle their own financial affairs through incapacity
  • Providing for a husband or wife, while keeping the assets intact for the benefit of children
  • Reducing Inheritance Tax liability (IHT) by taking assets out of an estate so reducing the amount on which IHT might otherwise be due
  • Ensuring that the proceeds from a life insurance policy go to the beneficiary without waiting for probate, and don’t form part of the estate for IHT purposes.


You will need to appoint trustees to look after the assets in the trust on behalf of the beneficiaries. They will have the power to make, manage and review investments and to make payments from the trust as set out in the trust deed.

There are several types of trust, and the one that’s right for you will depend on who the beneficiaries are, what the assets are, and how and when you want them distributed. You will need to take expert advice as to what type of trust will work best for your particular circumstances.

The value of investments and income from them may go down. You may not get back the original amount invested.