Help Me Understand Trusts (1 of 3)

Last verified: March 2026 (England & Wales)

Trusts mini-series (3 parts)

Part 1 (Trusts 101): Help Me Understand Trusts (you are here)
Part 2 (Glossary): What Is a Will Trust?
Part 3 (Decision guide): Choosing Your Family Trust

If you are new to trusts, start here. If you want a definition you can bookmark, use Part 2. If you want help choosing the right structure for your family, go to Part 3.

Quick-Read Summary

This story explains the difference between doing nothing, leaving a gift, and setting up a trust.
While chatting with friends in the pub, they asked me, ‘In simple terms, what is a trust?’ I explained it with a £50 takeaway. Read the story, then see how it translates to a Will.

Scenario 1: No Will, No Trust

Imagine Nikki has £50 in her bank account. If Nikki dies without a Will, set rules (called intestacy) decide who gets that £50, whether it’s who she wanted or not. In some cases, HMRC might help themselves to £20 of it (40% inheritance tax).

Scenario 2: A Straight Gift

Now, imagine Nikki gives her husband, Chris, the £50 as a gift. He owns it, legally and morally. If he spends it, loses it, or gives it away, it’s gone. 

This is a Standard Will idea in miniature: it says who gets what.

Scenario 3: A Simple Trust (The Takeaway Analogy)

This time, Nikki gives Chris the £50 and says:

“Please use this to buy us both a takeaway on your way home. If there’s anything left, get something for the kids.”

That’s it. She’s trusted him to follow those instructions. She’s now created a simple trust. Let’s break that down:

• Nikki and Chris are the first beneficiaries (they benefit first)
• The kids are the secondary beneficiaries (also known as remainder men) (they get what’s left — the “remainder”)
• Chris is the trustee — he’s holding and managing the money on trust
• The trust fund is the £50
• The terms of the trust: “Buy us a takeaway tonight, and, consider the children.”

Chris can’t decide to spend it on a few pints in the pub — that’s against the terms of the trust.

This is a Will with a simple trust, in addition to who gets what, it adds when, why, and what for.

Adding Flexibility: The Discretionary Trust

What if the takeaway is shut? Well, the original instruction starts to fall apart. But if Nikki adds a note that says:

“Ideally get a takeaway, but if something comes up, use your discretion.”

Then Chris can get a meal deal from M&S instead, because it’s still in the spirit of the trust. But he still can’t go to the pub. That’s now closer to a discretionary trust: more flexibility, same goal, still guided by Nikki’s wishes.

Let’s Apply This to the Real World

Now, let’s look at how this works with something more serious: the family home. Nikki and Chris own a house together worth £650,000. If Nikki dies without a Will trust:

• The house goes to Chris.
• Later in life, if Chris needs care, has financial difficulty or remarries, the house (or its value) could be lost.
• The children may never inherit what Nikki intended for them.

And on top of that, inheritance tax could be a problem:

• Chris’s estate might exceed £650,000.
• This could lead to over £130,000 in tax when he dies.
  (We’re ignoring exemptions here for simplicity.)
• The house may need to be sold to pay for the tax.

Enter the Will Trust

If Nikki split the house 50/50 and wrote, 

“Chris can live in this home as long as he lives, then give my 50% to the children afterwards,” 

Chris now has a home for life, but he cannot spend, give away, or lose Nikki’s half.

She could also say:

“I’d like my brother and our eldest child to help Chris make decisions about the house.”

Now you’ve got:

• a Property Life Interest Trust (PLIT)
• some trustee support around the property
• a clearer chain of control helping protect Nikki’s wishes

If Nikki also allowed a bit of flexibility, and later Chris needed expensive medical treatment or the children needed help buying a first home, the trustees might have room to deal with that if the trust allowed it.

Nikki could also leave a Letter of Wishes explaining what she would ideally like to happen, so the trustees are guided without being forced into one rigid outcome.

If Chris remarries, goes into care, or dies later, Nikki’s half is still on its intended route for the children.

A Flexible Life Interest Trust works in a similar way but can also cover money and other assets, not just property.

Summary: What a Trust Can Do

A trust adds another layer to a Will. It is not just about who gets what, but how, when, and for what purpose.
• It can help protect children, vulnerable beneficiaries, or a share of the family home.
• It can also help stop everything just landing outright in one person’s hands with no structure around it.
• Some trusts can help with tax planning, but that depends on the estate, the wording, and the rules at the time.
• The right trust depends on the family, the assets, and how much flexibility is actually needed.

No one trust suits everyone, but hopefully this gives you the basic idea.

What’s the difference between a Will and a Will Trust?

A Will sets out who gets what when you die. A Will Trust gives more control over how and when that happens — especially useful if you want to protect someone or limit tax. Think of it like car insurance. Will = Third Party, a Will Trust is like a fully comprehensive. Same value, same person, different protection.

Can trusts be changed later?

A trust in your Will can usually be changed while you are alive and still have capacity, because you can change your Will. After death, what can be changed depends on the wording, the trustees’ powers, and sometimes whether everyone affected agrees. A Letter of Wishes can help guide the trustees, but it is not usually binding.

Does this mean I’m giving up ownership?

No. A Will trust does not take effect while you are alive, so you still control your own assets during your lifetime. The trust only starts after death under the terms of your Will. That is very different from some lifetime trust arrangements, where assets may be transferred during life

Final Thoughts

I know we’ve used a food analogy, but this is serious stuff, and trusts don’t need to be scary. You just need someone who can explain them clearly and set them up properly. If anything in this article made you think, “That sounds like what I want,” then let’s have a proper conversation. At Fern Wills & LPAs, we’ll help you protect the people and things that matter — and we’ll explain every step in plain English.

Next in the series

Part 2 (Glossary): What Is a Will Trust?
Part 3 (Decision guide): Choosing Your Family Trust

Next Steps

If any of this sounds relevant to your family or property, contact Fern Wills & LPAs to discuss which trust best fits your circumstances.