A trust is a legal arrangement where trustees hold assets for beneficiaries. Will trusts start when you die and are the simplest option. Lifetime trusts such as a FAPT or SAT start now, can let assets pass without probate and protect children's inheritance, but cost more and have tax rules you must understand first.
How a trust works
Every trust has three roles. The settlor puts assets into the trust. The trustees own and manage those assets under the trust deed or Will. The beneficiaries benefit from them. In many family trusts you can be a settlor and a trustee, and sometimes a beneficiary as well.
Will trusts
A Will trust is written into your Will and only starts when you die. It costs little extra and does not change anything during your lifetime.
- Property protection trust: protects your share of the home for your children while your partner can carry on living there.
- Life interest trust: gives someone the income or use of assets for life, with the capital passing to others afterwards.
- Discretionary trust: trustees decide who benefits and when, useful for vulnerable beneficiaries or uncertain circumstances.
- Bare trust for children: holds an inheritance until a child reaches 18, or a later age through other trust types.
Lifetime trusts
A lifetime trust is set up now, signed as a deed, and assets such as your home are transferred into it. Because the trustees already own those assets, they can usually pass on without waiting for a grant of probate.
- Family Asset Protection Trust (FAPT): usually holds the family home and other assets for your children, with you as a trustee.
- Standard Asset Trust (SAT): holds a main asset such as a property, with the settlors keeping control while they have capacity.
Trust names are not set by law. Different providers use different names for similar arrangements, so always ask exactly what the trust holds, who the trustees and beneficiaries are, and what it can and cannot do.
What a trust can help with
- Protecting children's inheritance from sideways disinheritance, divorce or bankruptcy.
- Avoiding probate delays on assets already in a lifetime trust.
- Controlling when beneficiaries receive money, for example at 25 rather than 18.
- Providing for a vulnerable beneficiary without affecting their entitlement to support.
- Keeping arrangements private, as trust assets are not listed on a public grant of probate.
Tax points to check first
- Gift with reservation of benefit: if you put your home into trust and carry on living there rent free, it is normally still treated as part of your estate for inheritance tax.
- Entry and periodic charges: most lifetime trusts are relevant property trusts. Transfers above the £325,000 nil rate band can face a 20% entry charge, with up to 6% every ten years and exit charges.
- Residence nil rate band: the extra £175,000 allowance for a home passing to direct descendants can be lost with some trust structures.
- Trust Registration Service: most express trusts must be registered with HMRC, even if no tax is due.
- Capital gains tax and stamp duty may apply on transfers, depending on the asset and any mortgage.
This is general information, not legal or tax advice. Our panel firms are asked to explain these points in writing before you sign.
Typical trust costs in 2026
| Trust | When it starts | Typical cost |
|---|---|---|
| Property protection Will trust | On death | £250 to £500 with Will |
| Discretionary Will trust | On death | £300 to £700 with Will |
| FAPT | Now | £850 to £2,000 |
| SAT | Now | £850 to £2,000 |
Lifetime trusts may also involve HM Land Registry fees and ongoing administration. Ask for a written breakdown.