Glossary · UK
What is Will Trust?
A trust created by the terms of a will, taking effect on death, commonly used to control how and when beneficiaries receive an inheritance.
Full Definition
A will trust is a trust set up within the terms of a will, which only comes into existence when the person making the will (the testator) dies. Common uses include a life interest trust (giving a surviving spouse the right to income or to live in a property for life, with the capital passing to children afterwards -- often used in second-marriage or blended-family situations), a discretionary trust (giving trustees flexibility over how and when to distribute to a class of beneficiaries, useful where beneficiaries are young, vulnerable, or circumstances may change), or a bare trust for a minor child (holding assets until they turn 18). Will trusts can help protect assets from a beneficiary's future divorce or bankruptcy, control access for young or vulnerable beneficiaries, and in some structures reduce the Inheritance Tax exposure of a surviving spouse's own estate, though the rules interact closely with the residence nil-rate band and require careful drafting.