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Trusts

Will Trusts Explained

A will trust is a trust set out in your will that begins on your death, letting trustees hold assets for chosen beneficiaries rather than passing them outright.

9 min read · Written by the Fairchild Oldfield team · Last reviewed: July 2026

2 years
A trust created by a will generally does not need registering with the Trust Registration Service while it only holds estate assets for up to two years after the death.
Source: gov.uk, registering a trust, as at July 2026, subject to change.

A will trust is a trust written into your will that comes into effect when you die. Instead of assets passing directly to a person, they are held by trustees for one or more beneficiaries, under terms you set out in the will.

Will trusts are one of the more common tools in estate planning, used where an outright gift is not the right fit, for example to provide for a surviving partner while protecting an inheritance for children, or to look after a young or vulnerable beneficiary. This guide explains what a will trust is, the main types, how they are taxed, and where they can help. It sits within our wider Trusts Explained guide and our estate planning guide. Figures are current as at July 2026 and are subject to change.

What is a will trust?

A will trust is a trust that is set up by your will and only begins when you die. The relevant assets pass to trustees rather than directly to a beneficiary, and the trustees hold and manage them under the rules in your will. Because it is created by the will, a will trust is sometimes called a testamentary trust, and it is treated as commencing from the date of death (gov.uk, HMRC manual, as at July 2026, subject to change).

How does a will trust work?

A will trust works by naming trustees, beneficiaries and the assets to be held, then setting the terms on which those assets are used. On death, the personal representatives transfer the relevant assets into the trust, and the trustees take over managing them, paying any tax due and following your instructions. There must always be at least one trustee, and the trust can continue even if the individual trustees change over time.

  • Settlor. The person who makes the will and sets up the trust within it.
  • Trustees. The people who legally hold and manage the assets for the beneficiaries.
  • Beneficiaries. Those who may benefit, whether from income, capital, or both.
  • Trust terms. The rules in the will that say who benefits, and how and when.

The main types of will trust

Several kinds of trust can be created by a will, and the right one depends on what you are trying to achieve. Two of the most common are the interest in possession trust, which gives someone a right to income or to live in a property for life, and the discretionary trust, which leaves it to the trustees to decide who benefits and when. Each is taxed differently, so the choice matters.

Type of will trustHow it usually worksOften used for
Interest in possessionA named person (the life tenant) has a right to income, or to occupy a home, for life; capital passes to others afterwards.Providing for a surviving spouse or partner while preserving capital for children.
Discretionary trustTrustees decide which of a class of beneficiaries receive income or capital, and when.Flexibility, and providing for a group such as children or grandchildren.
Bereaved minor / 18-to-25Holds assets for children until a set age, with statutory conditions.Passing assets to young children or grandchildren.

The way each type is taxed for inheritance tax differs. See gov.uk, types of trust, as at July 2026, subject to change.

The purpose

Why people use a will trust

A will trust lets you keep some control over how and when assets are passed on, rather than handing them over outright. Many people choose one to provide for a second spouse while keeping an inheritance intact for children from an earlier relationship, to support a beneficiary who is young or vulnerable, or to give trustees flexibility over a group of beneficiaries. It can also help where a beneficiary might struggle to manage a large sum directly.

A will trust is not right for everyone. Trusts add administration for the trustees, the tax treatment can be complex, and beneficiaries do not own the assets outright. Because of that, setting one up is one option some consider after taking advice, rather than a default. It can be worth discussing with a qualified professional who can weigh it against a simple outright gift.

For a plain-English overview across trust types, see our Trusts Explained guide.

A common use

Two families

In blended families, an interest in possession will trust can let a surviving partner live in the home or receive income for life, while the capital eventually passes to the children, depending on circumstances.

How are will trusts taxed and registered?

Tax on a will trust depends on the type of trust and what it holds, and it can involve inheritance tax, income tax and capital gains tax. The starting point is that transfers between spouses and civil partners are generally exempt, and unused nil-rate and residence nil-rate bands can pass to the survivor (gov.uk, as at July 2026, subject to change). How the trust itself is then treated for inheritance tax turns on which kind it is.

For an interest in possession will trust that someone inherits, there is no ten-year inheritance tax charge; instead the trust assets are generally treated as part of the life tenant's estate, so 40% inheritance tax may be due on their death on value above the available bands (gov.uk, trusts and Inheritance Tax, as at July 2026, subject to change; standard 40% rate per gov.uk, as at July 2026, subject to change). Discretionary and most other relevant-property trusts instead face their own inheritance tax charges, which can arise on entry, at each ten-year anniversary, and when capital leaves the trust (gov.uk, trusts and Inheritance Tax, as at July 2026, subject to change).

Trustees also have registration duties. A will trust generally does not need to be registered with the Trust Registration Service while it only holds the estate assets for up to two years after the death, but registration is usually required beyond that period or where the trust becomes liable to UK tax (gov.uk, registering a trust, as at July 2026, subject to change). Because trust tax and reporting can be involved, this is an area where many people take professional advice.

A worked example (illustration only). A husband leaves his half share of the family home into an interest in possession will trust, giving his wife the right to live there for life. On his death, the gift to a trust for his spouse is generally exempt (gov.uk, spouse exemption, as at July 2026, subject to change). While she lives, the children are the eventual capital beneficiaries. On her death, the trust assets are generally treated as part of her estate, so inheritance tax may be due at 40% on value above the available bands, which can include her own £325,000 nil-rate band and any transferred bands (gov.uk, as at July 2026, subject to change; bands per gov.uk, as at July 2026, subject to change). Change the trust type, the ownership or the figures and the answer changes, so this is general information rather than a calculation for any real estate.

A word of caution

Will trusts and care fees

Will trusts are sometimes discussed in the context of care fees planning, most often a property trust that leaves one partner's share of the home in trust on the first death. Where structured and advised properly, this can be part of considered planning around later-life costs. It is important to be clear about what it does and does not do.

A local authority can look at whether assets were deliberately given away to reduce a care-fees contribution. Under the deprivation of assets rules, where it decides that avoiding care charges was a significant reason for a disposal, it may treat the person as still owning those assets. For that reason a will trust should never be presented as a way to deliberately avoid care fees; the aim is limiting or mitigating the impact of care costs within the rules, and it is an area to discuss with a qualified professional.

On means-tested care and deprivation of assets, see gov.uk, paying for your care, as at July 2026, subject to change.

The key rule

Deliberately giving assets away to reduce a care contribution can be challenged by the local authority under the deprivation of assets rules, and treated as if you still owned them.

Source: gov.uk, as at July 2026, subject to change.

How it comes into effect

A will trust, step by step

I

Drafted in the will

The trust, its trustees, beneficiaries and terms are set out within the will.

II

Begins on death

The trust commences from the date of death, and assets pass to the trustees. Source: gov.uk, as at July 2026, subject to change.

III

Trustees take over

They manage the assets, keep records and settle any tax that falls due.

IV

Register if needed

Registration is generally required beyond about two years or where UK tax arises. Source: gov.uk, as at July 2026, subject to change.

Will trusts in Scotland and Northern Ireland

This guide describes the law of England and Wales. Inheritance tax is a UK-wide tax, so the £325,000 nil-rate band and the 40% rate apply across all four nations (gov.uk, as at July 2026, subject to change). The surrounding succession law differs. Scotland has its own rules, including legal rights that can entitle a spouse and children to a fixed share of an estate regardless of the will, which can affect how a will trust operates. Northern Ireland has a separate but broadly similar system to England and Wales. Where an estate touches more than one UK nation, it can be worth taking advice in each.

Frequently asked questions

What is the difference between a will trust and a lifetime trust?

A will trust is created by your will and only begins when you die, whereas a lifetime trust is set up while you are alive. Both let trustees hold assets for beneficiaries, but the timing and tax treatment differ. A lifetime trust can involve immediate inheritance tax considerations, while a will trust commences on death. The right choice depends on your circumstances and often on professional advice.

Does a will trust avoid inheritance tax?

Not by itself. A will trust does not remove inheritance tax, and it cannot guarantee a saving. Assets passing to a spouse through certain trusts are generally exempt, but how the trust is later taxed depends on its type, and discretionary trusts can face their own charges (gov.uk, as at July 2026, subject to change). Because the rules are complex, many people take advice before relying on one.

Do you have to register a will trust?

Often, but not always immediately. A will trust generally does not need registering with the Trust Registration Service while it only holds the estate assets for up to two years after the death, and registration is usually required beyond that or where the trust becomes liable to UK tax (gov.uk, as at July 2026, subject to change). Trustees carry this duty.

Can a will trust help with care fees?

It may form part of considered care fees planning, but it should never be treated as a way to deliberately avoid care costs. A local authority can review whether assets were given away to reduce a contribution under the deprivation of assets rules and treat them as still owned (gov.uk, as at July 2026, subject to change). This is an area to discuss with a qualified professional.

Who controls the assets in a will trust?

The trustees do. They legally hold and manage the assets for the beneficiaries under the terms of your will, must act in the beneficiaries' interests, and are responsible for records and any tax due. There must always be at least one trustee, and the trust can continue if trustees change. Beneficiaries do not own the assets outright, which is often the point of using a trust.

How much does a will trust cost to set up?

Costs vary with complexity, from a will containing a trust to more detailed trust and tax planning, so a single figure is rarely meaningful without knowing your circumstances. Many firms set out fees before any work begins. Because trusts can have long-term tax and administrative consequences, it can be worth asking for clear, written fees and comparing what is included before you proceed.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.

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