What a will trust actually does
A will trust is a trust created by your will and only takes effect when you die. Instead of leaving assets outright to a beneficiary, the assets are held by trustees on terms you choose — for the people you choose, when you choose.
The trustees become the legal owners. The beneficiaries enjoy the benefit. That separation is what makes will trusts powerful.
The main types of will trust
Different trusts solve different problems. The most common are:
- Life Interest Trust — surviving partner can live in the home and receive income, but the underlying capital is preserved for the children
- Discretionary Trust — trustees decide who from a class of beneficiaries receives what and when (flexible for vulnerable beneficiaries)
- Nil-Rate Band Discretionary Trust — uses the £325,000 nil-rate band on first death to reduce IHT later
- Property Protection Trust — protects a share of the family home from care fee assessment
- Bereaved Minor's Trust — for children under 18, with strict tax advantages
Five reasons families set up a will trust
Will trusts aren't for everyone, but for the right family they save tens of thousands. The main use-cases:
- Protect children of a first marriage from being disinherited if the surviving partner remarries
- Shield a share of the home from care fee means-testing
- Use both partners' nil-rate bands fully (relevant for IHT-exposed estates)
- Provide for a vulnerable adult child without affecting their means-tested benefits
- Stagger inheritance for young adults instead of an outright gift at 18
What a will trust costs in 2026
Professionally drafted will trusts cost more than a simple will because the drafting is more complex and the trustees' duties need to be tailored:
- Will-based trust: £495–£995 fixed fee
- Couple's mirror wills with trusts: £750–£1,500
- Severance of tenancy (often needed for Property Protection Trust): £150–£250
- Ongoing trustee administration (if required): typically £200–£500 per year
Are will trusts taxed?
Tax depends on the type of trust. Most discretionary trusts pay income tax at 45% on income and CGT at 24% on gains, with a 10-yearly IHT charge of up to 6% on assets above the nil-rate band. Life interest trusts are usually taxed as part of the life tenant's estate. A specialist will model the tax position before recommending a trust — the planning only works if the after-tax outcome beats leaving assets outright.
