Trusts are a historic concept, dating back to the 12thCentury. A Trust is the formal transfer of assets (it may be property, shares or just cash) to a small group of people or to a Trust company with instructions that they hold the assets for the benefit of the intended beneficiaries.

For most people a Trust is established to arrange the family’s financial affairs.

The main attraction is the confidence it gives the creator (Settlor) of the Trust in how assets will be allocated and used in the future

Essentially a Trust offers a method of holding and managing property and/or money for beneficiaries whom are not ready to manage it for themselves, including future generations.

Here are examples of some of the most common family scenarios where trusts are used (usually in conjunction with a will) including:

  • to provide for a husband or wife after death while protecting the interests of any children; this can be particularly important for families where there are children from previous marriages.
  • to protect the inheritance of young children until they are old enough to take responsibility for their own affairs;
  • to provide for vulnerable relatives who are unlikely to be able to look after their own affairs;
  • to help succession planning in a family business.

Bare Trusts

Assets in a bare Trust are held in the name of a trustee. The beneficiary, however, has the right to all of the capital and income of the Trust at any time if they’re 18 or over (in England and Wales), or 16 or over (in Scotland). This means the assets set aside by the settlor will always go directly to the intended beneficiary.

Bare Trusts are often used to pass assets to young people – the trustees look after them until the beneficiary has reached a designated age.


You leave your brother some money in your Will. The money is held in Trust.

Your brother is entitled to the money and any income (for example interest) it earns. He can also take possession of any of the money at the relevant time.

Interest in Possession Trusts

This type of Trust operates where the trustee must pass on all trust income to the beneficiary as it arises (less any reasonable and properly incurred expenses).


You create a Trust for all the shares you own.

The conditions of the trust say that when you die, the income from those shares go to your wife for the rest of her life. When she dies, the shares will pass to your children.

Your wife is the income beneficiary and has an ‘interest in possession’ in the trust. She does not have a right to the shares themselves.

Immediate Post Death Interest Trust (IPDIT)

An IPDIT allows you to leave your spouse, or civil partner, the right of occupation of your property as a ‘life tenant’, and/or the benefit of the income from your investments, without them actually owning the assets underlying capital value, thus protecting the capital for your intended beneficiary, known as the ‘remainderman’.

An IPDIT is very useful in second marriages, where your wish is to ring fence the capital assets of your estate for the children of your first marriage.

An example, where a husband and wife whom have both been married previously and each have children from their first marriage, jointly own a property. To ensure that their individual half share of the property passes to their respective children, mirror Wills are written for husband and wife making use of an IPDIT.

A Trust is then created under the Will of the first to die which does not actually terminate until the death of spouse or civil partner ‘the life tenant’, unless however,  clauses are added identifying triggering events which would bring the IPDIT to an end, such as a re-marriage or the life tenant ceasing to occupy the property.

There are inheritance tax implications if the life tenant continues to benefit from the IPDIT assets until they die. On their death the underlying capital values are added to the value of their estate for the purposes of Inheritance Tax (“IHT”) however you are able to utilise the transferable IHT exemption allowance (known as the “nil rate sum”) from the first to die, to offset the IHT liability on the second estate.

An example, in the event you leave all of your estate to your spouse or civil partner for life and thereafter to your children and you have your own nil rate sum available to transfer, also if there is a property with a residential nil rate sum available, then these reliefs can be applied for IHT purposes against the value of the estate in order to reduce the IHT liability.

In addition, in the event either of the married couple has been widowed from their first marriage, then they may also make use of their first spouse’s nil rate sum, if it is still available

This is a very specialist area and drafting needs to accurately reflect the Settlors’ situations and their wishes in order to prevent administration and IHT issues arising in the future.

We're here to help

See What Our Customers Think

“Having recently been divorced I was aware that my pervious Will was void.
I was referred to Wills Attorneys & Trusts by a satisfied client and I am so pleased that I was.
Teresa went through the Will process in detail and advice on powers of attorneys I required due to my change in circumstances.
The process was easy and very informative.
I could not recommend her enough."

- Chris, Cheshire.

"Having been separated but not divorced for sometime, it dawned on me that I needed to make a new Will and power of attorneys granted to my brothers for health and wealth. 

Following a leaflet, I received, I contacted Teresa to discuss my requirements. 

Notwithstanding my relatively straightforward position, as my circumstances had changed, without a new Will my old Will of 2005 would have been effective, which did not accord with my latest wishes. 

Teresa made the whole process very straightforward; I would recommend her services strongly."

- Mark, Knutsford Cheshire.

"We contacted Teresa at Wills Attorneys & Trusts following a recommendation as we are now both over 65 and wished to create a living trust for our peace of mind for our children as also one of our children is vulnerable. 

Teresa was of great assistance attended our home when convenient for us and explained the process and the benefits of the trust clearly to us. 

In addition, we were able to deal with updating our Wills and powers of attorneys at the same time. 

Teresa was available at the end of the phone and no questions were too much trouble. 

An enjoyable stress-free experience." 

- Susan and Trevor, Hale Cheshire. 

We have been together for over 20 years but remained unmarried by choice. During this time we have accrued equity in property, however, we realised recently that there are inheritance tax issues if couples remain unmarried and have not registered a civil partnership.

On the advice of Teresa we are now registering our status as civil partners and have made Wills in contemplation of our new status and dealt with our power of attorneys for health and wealth.

We are very happy to have finally dealt with these really important matters !

Teresa was a great help dealing with all our enquiries in a manner we understood. We would highly reccommend her to anyone needing her services.

-Sandra and Jim, Northwich, Cheshire.


Looking for more information

Get in touch