This article explains the law and estate planning position in England and Wales. Different rules apply in Scotland and Northern Ireland. Scotland uses confirmation rather than probate and has different succession rules, including legal rights which can allow a surviving spouse, civil partner or children to claim a share of certain assets regardless of what a will says. If the estate or person making the will has connections with Scotland or Northern Ireland, specific legal advice should be taken. Wills and trusts are both important estate planning tools, but they do very different things. A will sets out what should happen to a person's estate after they die. A trust is a legal arrangement that allows assets to be managed by trustees for the benefit of chosen beneficiaries. The two are often discussed together because they can both affect inheritance, family wealth, property and future planning. However, they should not be confused. A will takes effect on death, while some trusts can operate during a person's lifetime as well as after death. A will appoints executors to administer an estate, while a trust appoints trustees to manage assets according to the terms of the trust. For many families, a straightforward will may be enough. For others, a trust can provide additional control, protection or flexibility, particularly where there are young beneficiaries, vulnerable family members, blended families, property ownership considerations or more complex estate planning needs. Understanding the difference between a will and a trust can help you decide what arrangements may be appropriate for your circumstances.
A will is a legal document that sets out how a person wants their estate to be distributed after they die. The person making the will is known as the testator.
A will can name executors, appoint guardians for children, leave gifts to individuals or charities and explain who should receive the remainder of the estate after debts, tax and expenses have been paid.
The estate may include property, money, investments, personal possessions, business interests and other assets owned by the deceased at the date of death. The will provides instructions for how those assets should be dealt with, subject to the law and any valid claims that may arise.
A will only takes effect after death. While the person who made it is alive, they remain free to deal with their assets, change their will, make a new will or revoke it, provided they have the required mental capacity.
If someone dies without a valid will, their estate is distributed under the rules of intestacy. These rules decide who inherits according to a fixed legal order, which may not reflect the person's wishes or family circumstances.
A trust is a legal arrangement where one or more people, known as trustees, hold and manage assets for the benefit of others, known as beneficiaries.
The person who creates the trust is usually called the settlor. They transfer assets into the trust or set out instructions for a trust to be created. The trustees then manage the trust assets in accordance with the trust terms and their legal duties.
Trusts can be created during lifetime or through a will. A lifetime trust is created while the person is alive. A will trust is created by the terms of a will and comes into effect following death.
Trusts can hold different types of assets, including property, money, investments, shares and business interests. The trustees do not hold the assets for their own personal benefit.
They must manage them for the beneficiaries and in accordance with the trust document and the law.
A trust can be useful where someone wants assets to be controlled or managed over time rather than passed directly to beneficiaries immediately.
Modern trusts are not generally able to continue indefinitely. For trusts subject to the current perpetuity rules in England and Wales, the statutory perpetuity period is generally 125 years, although older trusts and certain specialist arrangements can be subject to different rules.
The main difference is timing and control. A will takes effect on death and directs how the estate should be distributed. It appoints executors to administer the estate and ultimately pass assets to the beneficiaries named in the will.
A trust can operate during lifetime or after death. It allows trustees to hold and manage assets for beneficiaries, potentially for many years. This can provide greater control over when and how beneficiaries receive assets.
For example, a will might leave money directly to an adult child. Once the estate has been administered, that child receives the money outright.
A trust could instead allow trustees to hold the money until the child reaches a particular age or make funds available gradually depending on the child's circumstances.
A will is primarily concerned with what happens to assets on death. A trust is often used where those assets need to be managed, protected or controlled after they have been transferred.
After someone dies, the executors named in the will are responsible for administering the estate. Their role includes identifying assets, valuing the estate, paying debts and taxes, applying for probate where required and distributing the estate according to the will.
A Grant of Probate may be needed before the executors can deal with certain assets, such as property owned in the deceased's sole name, substantial bank accounts, investments or shares.
Although a will can appoint more than four executors, a maximum of four executors can normally be named on the probate application and grant.
Once probate has been obtained where necessary and estate liabilities have been settled, the executors distribute the estate. If the will leaves assets directly to beneficiaries, those beneficiaries usually receive their inheritance outright.
This can work well where beneficiaries are adults, financially responsible and able to manage what they inherit.
However, direct inheritance may not always be suitable. For example, a beneficiary may be under 18, vulnerable, experiencing financial difficulties or unable to manage money independently.
In those circumstances, a trust within the will may provide a more appropriate structure.
A trust works by separating legal ownership from beneficial entitlement. The trustees hold the legal title to the trust assets, while the beneficiaries are the people who may benefit from those assets.
The trustees are responsible for managing the trust. This may include investing money, maintaining property, making payments to beneficiaries, keeping accounts and records, dealing with tax reporting and completing other regulatory requirements.
The trust document sets out the trustees' powers and the beneficiaries' rights. Some trusts give beneficiaries a fixed entitlement. Others give trustees discretion over which beneficiaries receive funds, when they receive them and how much they receive.
A trust can last for a relatively short period or for many years depending on its purpose and terms. For example, a trust may hold funds for a child until they reach a particular age. Another may provide income or occupation of a property to one person during their lifetime, with the capital ultimately passing to somebody else.
This flexibility is one of the main reasons trusts are used in estate planning.
Many trusts are created within wills. These are commonly referred to as will trusts or testamentary trusts.
A common example is a trust for minor children. If a child is under 18, trustees may need to manage their inheritance until they reach the age specified in the will. Depending on how the trust is drafted, the trustees may be able to use funds for education, maintenance and other expenses in the meantime.
Another common structure is a life interest trust. This may allow one person, often a surviving spouse or partner, to benefit from an asset or receive income during their lifetime.
After that person dies, the asset can pass to other beneficiaries, such as children from a previous relationship.
For example, a surviving spouse could be given the right to live in the family home for the rest of their life, while the deceased's share of the property is ultimately preserved for their children.
Discretionary trusts can also be used.
These give trustees flexibility to decide how funds are applied among a class of beneficiaries. This can be useful where future circumstances are uncertain or where a beneficiary may need additional protection.
Trusts can also be used to support vulnerable beneficiaries, protect inheritance for children from an earlier relationship or manage assets where beneficiaries are not ready to receive them outright.
A trust may be included in a will where direct inheritance would not achieve the desired outcome.
For parents, a trust can ensure that children's inheritance is managed if they inherit before reaching adulthood. Trustees may be able to pay for education, maintenance or other needs while protecting the main inheritance until the children are older.
For blended families, a trust can help balance the needs of a surviving spouse or partner with the desire to preserve assets for children. A life interest trust, for example, may allow a surviving spouse to continue living in the family home while protecting the deceased's share for children after the spouse's death.
For vulnerable beneficiaries, a properly structured trust can provide support without necessarily handing over a large sum of money outright. This can be particularly important where a beneficiary has additional needs, receives means-tested benefits, has financial difficulties or may be vulnerable to financial pressure from others.
A trust can also provide flexibility. Circumstances may change considerably after someone dies, and trustees may be able to respond to those changes in a way that a simple direct gift cannot.
Yes. A trust can be created during a person's lifetime. This is often called a lifetime trust or inter vivos trust.
A lifetime trust may be used where someone wants to transfer assets into trust while they are alive. The trustees then hold and manage those assets according to the terms of the trust.
Lifetime trusts can be useful in some estate planning situations, but they must be approached carefully.
Transferring assets into a trust can create Inheritance Tax, Capital Gains Tax and Income Tax consequences.
There may also be significant practical consequences. Once assets have genuinely been transferred into a trust, the settlor may no longer be able to control or use them in the same way as before.
If someone gives an asset away but continues to benefit from it, anti-avoidance rules may prevent the intended Inheritance Tax treatment.
Lifetime trusts should therefore not be created simply because they appear protective or tax-efficient. The legal, tax and practical implications need to be considered before assets are transferred.
A trust may avoid probate for assets that were properly transferred into a lifetime trust before death because those particular assets are no longer owned by the deceased personally.
However, this does not mean that every trust avoids probate or that creating a trust removes the need for estate administration.
If a trust is created by a will, it only takes effect following death. Probate may still be required before the executors can collect the relevant estate assets and transfer them to the trustees.
For lifetime trusts, assets already legally owned by the trustees may fall outside the probate estate. However, the trust itself can create ongoing administration, record-keeping, tax and regulatory requirements.
It is therefore important not to assume that creating a trust automatically avoids probate, avoids tax or makes an estate simpler. The position depends on the type of trust, when it was created, what assets it contains and how those assets are owned.
A trust can form part of Inheritance Tax planning, but a trust does not automatically reduce Inheritance Tax.
Different trusts have different tax treatments. Depending on the structure and assets involved, Inheritance Tax charges can potentially arise when assets are transferred into a trust, at ten-year anniversaries or when property leaves certain trusts.
Trustees may also have Income Tax and Capital Gains Tax responsibilities.
One particularly common misunderstanding concerns life interest trusts for surviving spouses. A qualifying life interest for a spouse or civil partner may benefit from the spouse exemption when the first person dies. However, this does not normally mean that the value has escaped Inheritance Tax permanently.
Where the surviving spouse has a qualifying interest in possession, the underlying trust property will generally be treated as part of their estate for Inheritance Tax purposes when they later die. In many cases, therefore, the trust defers the potential Inheritance Tax charge until the second death rather than removing it altogether.
This does not make the trust ineffective. Its purpose may be to preserve the underlying capital for children or other beneficiaries while still providing for the surviving spouse. The important point is that asset protection and tax saving are not necessarily the same thing.
The Residence Nil Rate Band is an additional Inheritance Tax threshold which may be available where a qualifying residence is inherited by direct descendants such as children or grandchildren.
How the family home is left can therefore have a significant effect on the overall Inheritance Tax position.
Some trusts can allow the Residence Nil Rate Band to remain available, while other structures may prevent the necessary conditions from being met. For example, the rules can apply to certain qualifying interests in possession where the home ultimately passes to direct descendants, but a discretionary trust may require much more careful consideration.
The rules are technical and the result depends on the wording of the will, the type of trust, who benefits and the wider value of the estate.
Where the family home represents a significant part of an estate, the potential effect on the Residence Nil Rate Band should therefore be considered before deciding between an outright gift and a trust structure.
Pensions have traditionally been treated differently from many other estate assets, which has made them an important part of estate planning.
However, this area is changing significantly.
For deaths on or after 6 April 2027, most unused pension funds and pension death benefits are due to be included within the value of a person's estate for Inheritance Tax purposes. There are exceptions, including certain death-in-service benefits, but the change means pensions will need to be considered much more closely alongside wills, trusts and the rest of the estate.
This is particularly important for people with substantial pension savings who previously planned on the basis that those funds would sit outside their estate for Inheritance Tax purposes.
Existing wills and estate plans may therefore need to be reviewed before the new rules take effect, particularly where pensions form a significant proportion of overall family wealth.
With a will, the executors control the estate during the administration period. Their responsibility is to collect the assets, pay liabilities and distribute the estate according to the will.
Once an asset is distributed outright to a beneficiary, that beneficiary normally controls their inheritance.
With a trust, the trustees control the trust assets. They must act in accordance with the trust terms and their legal duties towards the beneficiaries. Depending on the type of trust, beneficiaries may not have an immediate right to receive the assets themselves.
This distinction is important. A will can pass assets directly. A trust can delay or structure how those assets are accessed and used.
For example, trustees may be able to pay school fees for a child, allow a beneficiary to occupy a property, provide income to a spouse or make discretionary payments to family members depending on their circumstances.
The choice of trustees is therefore extremely important. Trustees should be trustworthy, organised and capable of dealing with financial, legal and sometimes difficult family decisions.
Executors and trustees perform different roles, although the same people can be appointed to both positions.
Executors administer the estate after death. Trustees manage trust assets for beneficiaries.
Where a will creates a trust, the executors may initially collect the estate assets and then transfer the relevant property into the trust. The trustees then become responsible for managing those assets going forward.
When choosing executors or trustees, it is important to consider whether they have the time, judgement and ability to carry out the role. They may need to deal with financial institutions, beneficiaries, tax reporting, property matters and difficult family decisions.
For straightforward estates, family members or close friends may be suitable. For more complex trusts, it may be appropriate to appoint a professional trustee or solicitor, either alone or alongside family members.
Trustees can potentially remain responsible for the trust for many years, so appointments should be considered carefully. It is also sensible to appoint substitute executors and trustees in case the first choices are unable or unwilling to act.
Trust administration can involve more than simply managing the assets.
Most express trusts now fall within the Trust Registration Service rules unless a specific exclusion applies.
Will trusts benefit from an important temporary exclusion. Broadly, a will trust which only contains assets from the deceased's estate and is wound up within two years of death will not usually need to be registered solely because it is a will trust.
However, where the trust continues beyond the two-year period, it may need to be registered with HMRC's Trust Registration Service. Trustees can then have ongoing responsibilities to keep the registration up to date as well as dealing with accounts, tax and the administration of the trust itself.
This is an important practical consideration because people appointed as trustees are sometimes surprised by the amount of administration involved.
Anyone agreeing to act as a trustee should therefore understand both the legal responsibilities and the ongoing reporting requirements attached to the role.
For many people, a well-drafted will is sufficient.
If the estate is straightforward, beneficiaries are adults and there are no particular concerns about control, vulnerability or future protection, direct gifts through a will may be appropriate.
A will allows you to decide who should inherit, who should administer the estate and what should happen to specific assets. Without a valid will, the intestacy rules apply, which may lead to an outcome that does not reflect your wishes.
However, a will alone may not provide enough flexibility in every case. If you want to protect assets for children, provide for a spouse while preserving assets for somebody else or support a vulnerable beneficiary, a trust may be worth considering.
The key is to ensure that the will is tailored to your circumstances rather than relying on a generic template which may not properly address your family structure or estate planning objectives.
A trust does not usually replace the need for a will.
Even if you create a lifetime trust, you may still own assets personally when you die. These assets will need to pass under your will or, if there is no valid will, under the rules of intestacy.
A will can also appoint executors and guardians for children and deal with bank accounts, personal possessions, vehicles, future assets and property that was never transferred into the trust.
Relying on a trust alone can therefore leave gaps.
In most estate planning arrangements, a trust should work alongside a properly drafted will rather than replace it. The documents should be consistent and carefully drafted so that they operate together.
A will is not better than a trust, and a trust is not better than a will. They are designed to achieve different things.
A will is the fundamental document for setting out what should happen to your estate when you die. It allows you to name executors, beneficiaries, guardians and specific gifts.
A trust becomes useful where assets need to be managed, protected or controlled for a period of time. It may be appropriate where beneficiaries are young or vulnerable, where family relationships are more complex or where someone wants greater control over what happens to an asset after their death.
Some people need only a will. Others benefit from a will containing trust provisions. Some may also use lifetime trusts as part of wider estate planning.
The most effective starting point is to identify what you are trying to achieve.
Who should benefit? When should they receive the assets? Do you need to provide for one person while ultimately protecting capital for somebody else? Are there tax issues? Are there vulnerable beneficiaries or complex family relationships?
Once those objectives are clear, the appropriate legal structure can be considered.
One common mistake is assuming that trusts are only for extremely wealthy families. In reality, trusts can be useful in a wide range of circumstances, particularly where children, vulnerable beneficiaries, property or blended families are involved.
Another is assuming that a trust automatically saves Inheritance Tax. Trusts can form part of tax planning, but they can also create their own tax charges and reporting responsibilities.
Life interest trusts are a good example.
They may be extremely useful for protecting capital while providing for a surviving spouse, but they should not automatically be viewed as a way of removing the property from Inheritance Tax altogether.
Some people also assume that a trust avoids all disputes. A well-drafted trust can reduce uncertainty, but it cannot guarantee that disagreements will not arise. Trustees can still face difficult decisions and beneficiaries may question how assets are being managed.
A further mistake is creating a trust without understanding the practical consequences. Trustees need to manage assets properly, keep records, consider tax and comply with applicable registration and reporting requirements. This can be a long-term responsibility.
A trust should therefore be used because it achieves a clear estate planning objective, not simply because it sounds more sophisticated than a straightforward will.
Wills and trusts should be reviewed regularly, particularly after major changes in personal or financial circumstances.
Marriage and civil partnership are particularly important.
In England and Wales, getting married or entering into a civil partnership will generally revoke an existing will automatically. The main exception is where the will was specifically drafted in contemplation of the marriage or civil partnership and satisfies the legal requirements for that exception.
This means someone who marries with an existing will should not simply assume their old will continues to protect their wishes. If it has been revoked and no replacement will is made, they could ultimately die intestate.
Divorce and dissolution work differently. They do not normally revoke the entire will. Instead, the will generally takes effect as though the former spouse or civil partner had died before the person who made the will, meaning gifts to them and appointments such as executor or trustee will usually fail.
You should therefore review your arrangements if you marry, enter a civil partnership, divorce, separate, have children, buy or sell property, start a business, receive a significant inheritance, move abroad or experience a major change in financial circumstances.
A review is also sensible where an executor, trustee or beneficiary dies, loses capacity or is no longer an appropriate person to fulfil the intended role.
Tax rules can change too. The changes to the Inheritance Tax treatment of pensions from April 2027 are a good example of why an estate plan that was appropriate several years ago may need to be revisited.
A will and a trust are both valuable estate planning tools, but they serve different purposes.
A will sets out what should happen to your estate after death. It appoints executors, names beneficiaries and provides instructions for distributing your assets.
A trust allows assets to be held and managed by trustees for beneficiaries, either during your lifetime or after death.
For some people, a straightforward will is enough. For others, a trust can provide greater flexibility, control and protection, particularly where there are children, vulnerable beneficiaries, blended family arrangements, property considerations or more complex inheritance planning needs.
Trusts also bring additional responsibilities. Tax treatment, the Residence Nil Rate Band, Trust Registration Service requirements and ongoing trustee duties all need to be considered alongside the intended benefits of the arrangement.
The right approach depends on your assets, family circumstances and objectives. It is important to take advice before creating or changing a will or trust, particularly where tax, pensions, property or vulnerable beneficiaries are involved.
At Premier Solicitors, our private client team provides clear, practical advice on wills, trusts, probate, estate administration and Inheritance Tax planning.
We can help you prepare a will, review an existing will, create appropriate trust provisions and advise on whether a lifetime trust may be suitable for your circumstances.
Our team can also advise executors and trustees on their responsibilities, including trust administration, registration requirements and the tax considerations that may apply.
If you are unsure whether you need a will, a trust or both, contact Premier Solicitors today for tailored advice on protecting your estate and putting the right arrangements in place.
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