What is a will trust?

There are many reasons to set up a trust when you write your will, including:

• Setting the age you want beneficiaries to inherit

• Protecting your share of any joint-owned property

• Safeguarding your estate from potential care home fees for your partner

• Making sure your estate goes to the beneficiaries who need it most

• Making a plan for vulnerable beneficiaries who need extra support

• Making sure your children are provided for if your spouse remarries

• For tax advantages

There are many different types of trusts that can be included as part of your will. Here are some of the most common trusts and their benefits:

Bare trust

A bare trust is created when money is left to children or grandchildren, but you die before they turn 18. It gives them the right to anything they inherit in the trust, plus any income gained over time – from bank interest, for example.

The money will be held in the name of a trustee. You can choose who you want this to be when you write your will.

When your beneficiary turns 18, your trustee will transfer the trust fund into their name, allowing them to access their inheritance.

A fixed-interest trust

By default, any beneficiaries who are children will inherit when they turn 18. But with a fixed-interest contingent trust, you can increase this age to 21, 25 or higher if you wish. You can make this type of trust if you're satisfied the beneficiary will be capable of managing the inheritance on their own. 

Life-interest trust

A life-interest trust is a slightly more complex trust that lets you leave money and property to someone for their lifetime. This is usually the partner of the person creating the trust, otherwise known as the “life tenant”. The assets would then pass to your beneficiaries after they die, such as your children or grandchildren.

In most cases, the life tenant continues living in the house and is entitled to any income the trust receives. This usually comes from bank interest or ongoing income from a business or rental property. But the value in the asset placed in trust is protected (otherwise known as the “capital”).

It’s not uncommon for trusts to allow capital payments to be made to the life tenant. This can be helpful if the trust doesn’t provide much income. After the life tenant dies, the remaining trust capital is passed on to the beneficiaries named in the will.

Discretionary trust

A discretionary trust is the most flexible type of trust, as it allows your trustees to choose how the money is shared out between a number of beneficiaries. This could be based on which beneficiaries need the most support, or simply to make sure they get the money when they need it most.

Here are some of the main reasons to set up a discretionary trust:

• You want your beneficiaries to receive their inheritance gradually over time, rather than in one lump sum

• You want your trustee to be able to judge which of your beneficiaries need the money most, rather than giving everyone an equal amount

• You want to help someone who is in a vulnerable state, but you’re worried about giving them the money directly or in a lump sum

• You want to leave money to someone receiving means-tested benefits, but you don’t want to impact the amount they receive

The right type of trust for you will depend entirely on your circumstances and the people you want to benefit in the future.

If your situation is fairly simple and you’re happy for any children in your will to receive their inheritance when they turn 18, a bare trust should be able to cover all your needs. This is included as part of our online will writing service, which is just £100 for a single will or £160 for couples.

If you want to leave an inheritance to take effect when a beneficiary reaches an age over 18, for example 21 or 25 you’ll need to make a will which includes a fixed-interest trust using our telephone will writing service. This is just £240 for a single will or £380 for couples. To find out more, please give us a call on 020 3695 2090.

If your needs are a little more complex, talk through the details with us when you call, and we'll explain how we can support you.

It costs just £100 to write a will online and set up a simple trust with Farewill – or £160 for couples. If you die before any of your beneficiaries turn 18, their inheritance will be held by your trustees until they’re old enough to inherit.

If your wishes are more complex, talk it through with us on the phone. We'll explain how we can help, and how much it will cost.

The maximum length of time a trust can last is 125 years. However, the length of a trust is usually set much lower.

Some trusts end when a beneficiary reaches a certain age, as set out in your will. A bare trust, for example, will end when your beneficiary turns 18 and receives their inheritance.

With other trusts, the duration is more flexible. A discretionary trust, for example, will only end when the full value of the trust has been distributed by your trustees.

You can set up a trust by including it as part of your will. With Farewill, you can set up a bare trust using our online will writing service.

And if you want to leave an inheritance to someone which takes effect when they reach an age over 18, for example 21 or 25, and you’re satisfied they’ll be capable of managing the inheritance on their own, you can make a will using our telephone will writing service. 

For more complex trusts, we recommend talking it through with us on the phone. We'll explain how we can support you, and give you a fixed price.

Usually, trustees are the same people as the executors named in the will, but you can appoint someone else to deal with the trust fund if you wish. Because this is an important responsibility, most people choose close friends or family members. However, if you’re concerned it’s too big a burden for your loved ones, or you don’t have anyone willing or able to act in this role, you may want to consider appointing a professional, for example, Farewill Trustees. 

If you appoint Farewill Trustees, and either there is a co-executor who is happy to act on their own, or the residuary beneficiaries are happy to deal with the administration themselves, and we believe that’s in the best interests of the estate, we will step down without fuss or fee. 

However, as trustees, it’s our responsibility to refuse to step down in certain situations, for example, where there are concerns about a co-executor being able to act, the estate is complex or there is a dispute about the will.

We would recommend that you choose two trustees when writing a will and setting up a trust, but you can choose up to four if you wish.

Yes, we recommend that you include a detailed letter of wishes alongside your will and trust. This will enable you to provide guidance for your trustees as to what you would like to happen in certain scenarios. You are able to do this whether you make your will with someone face to face, with Farewill over the telephone, or in the ‘My choices’ section of our online service.

• A trust is a way of passing control of your assets to someone else so they can be protected for your beneficiaries

• A will and bare trust costs just £100 (£160 for couples) with our online service

• We recommend that you include a detailed letter of wishes alongside your will to help trustees make decisions on your behalf