Trusts vs. Wills: Why a Trust May Be the Smarter Choice in Estate Planning

By Natalie Popova, Legal Consultant | Express Law Solutions

Disclaimer: This article is for general information only and does not constitute legal advice. For specific guidance, contact Express Law Solutions.

Introduction

Estate planning is a vital process for protecting wealth and ensuring that property, business interests, and family assets are preserved for future generations. Most people are familiar with a Will as the traditional tool for passing on assets, but fewer fully understand the advantages of a Trust. In complex family situations, high-value estates, or where tax and asset protection are concerns, trusts often provide significant benefits over wills.

This article explores the differences between trusts and wills under English law, highlights the key benefits of trusts, and explains when a trust may be the most effective estate planning solution.

What Is a Trust?

A trust is a legal arrangement in which a person (the settlor) transfers assets to one or more trustees, who manage them on behalf of beneficiaries. Trusts have deep roots in English common law and are governed today by statutes such as the Trustee Act 2000, the Inheritance Tax Act 1984, and the Perpetuities and Accumulations Act 2009.

Types of trusts include:

Inter vivos trusts – created during the settlor’s lifetime.
Testamentary trusts – established in a will and activated on death.

Wills and Their Limitations

A will is a legal document setting out how an estate is distributed after death, regulated in England and Wales by the Wills Act 1837. While essential, wills carry limitations:

Probate requirement – wills must go through probate, a time-consuming and costly court process.
Public record – once probated, a will becomes public, exposing family and financial details.
Fixed distribution – wills direct a one-off division of assets, with no long-term management or flexibility.

To understand why a will is still often the starting point in estate planning, see our detailed guide:
Do You Really Need a Will in England and Wales? 5 Scenarios Where It Can Save Your Family Thousands

Key Advantages of Trusts Over Wills

1. Avoidance of Probate

Assets in a trust bypass probate, ensuring:

Faster transfer of wealth.
Lower administrative and legal costs.
Less risk of disputes.

2. Privacy and Confidentiality

A trust is private, it does not require public registration. Unlike a will, which becomes public after probate, a trust keeps asset values, distributions, and beneficiaries confidential.

Bypassing probate eliminates public court filings.
Maintaining confidentiality protects sensitive family and financial details.
Protecting beneficiaries shields heirs from fraud, identity theft, or creditor pressure.

3. Tax Efficiency

Trusts can significantly reduce Inheritance Tax (IHT) liabilities through mechanisms such as Potentially Exempt Transfers (PETs) and Chargeable Lifetime Transfers (CLTs).

4. Asset Protection

Trusts protect assets from:

Creditors.
Divorce settlements.
Mismanagement by beneficiaries.

5. Control and Flexibility

Settlors can specify conditions for distributions, e.g.:

Income only until a beneficiary reaches a certain age.
Funds restricted for education or healthcare.
Life interest trusts providing income for a spouse while preserving capital for children.

6. Care for Vulnerable Beneficiaries

Specialised trusts, such as Disabled Person’s Trusts, safeguard vulnerable dependants while preserving eligibility for state benefits.

7. Business Continuity

Placing a family business in trust avoids probate delays, ensures continuity, and prevents operational disruption.

Common Types of Trusts in Estate Planning

Bare Trusts – beneficiaries have immediate rights.
Discretionary Trusts – trustees decide distributions.
Life Interest Trusts – income for one beneficiary, capital for others.
Disabled Person’s Trusts – protection for vulnerable individuals.
Charitable Trusts – philanthropic purposes, often with IHT exemptions.

When to Consider a Trust

A trust may be the right choice if:

You have minor children requiring financial support.
You wish to provide for a second spouse but preserve assets for children from a first marriage.
You own a family business.
You want to protect assets from creditors or divorce.
You have a vulnerable or disabled beneficiary.
You want to maintain privacy in estate planning.
You seek to reduce exposure to Inheritance Tax (IHT).

Potential Disadvantages of Trusts

While trusts offer many benefits, they involve considerations:

Set-up and administration costs – legal drafting, trustee fees, and compliance expenses.
Complexity – trusts require careful planning and ongoing management.
Tax implications – certain trusts are subject to the UK “relevant property regime,” including 10-year periodic charges and exit charges.

Example Annual Costs:

Small Trust (£100,000): £1,500–£3,000
Medium Trust (£500,000): £3,500–£7,500
Large Trust (£1,000,000): £7,000–£15,000

Trust vs. Will – Key Differences

Trust vs. Will – Key Differences

Aspect	Will	Trust
When it takes effect	Only after death	Can take effect during lifetime or after death
Probate	Required (time-consuming, public)	Avoids probate (private, faster)
Privacy	Becomes public record	Remains private
Control	One-off distribution of assets	Ongoing management & conditional distributions
Tax Planning	Limited options	Can reduce IHT liability (Inheritance Tax Act 1984)
Asset Protection	Assets may be exposed to creditors, divorce, disputes	Can shield assets from claims and mismanagement
Beneficiaries	Fixed, as set out in the will	Flexible – trustees decide how/when assets are distributed
Costs	Relatively inexpensive	More expensive to set up & manage
Best for	Simple estates, basic asset distribution	Complex estates, business owners, vulnerable beneficiaries, IHT planning

Conclusion

Using a trust in estate planning offers a level of privacy, protection, and control that a will cannot. Trusts safeguard wealth, shield families from public exposure, and reduce inheritance tax liabilities. For individuals and families — especially those with high-value estates — trusts are often the smarter, more secure choice for long-term wealth management.

Need help? At Express Law Solutions, we review, draft, and negotiate contracts to ensure they’re fair, clear, and enforceable.

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