Trusts
Trusts can be a genuinely useful way to protect property and provide for family…
— but they're not automatically the right answer for everyone, and the rules around running one properly have got stricter in recent years. I'll give you a straight answer on whether a trust actually makes sense for your situation, not just set one up because you asked.
What a trust actually is:
A trust separates legal ownership from the benefit of an asset. You (the "settlor") transfer assets to trustees, who hold and manage them for the people named ("beneficiaries") according to a trust deed. Done properly, it can protect assets, provide for family across generations, or look after someone who can't manage money themselves.
But if a trust is just set up and then ignored, it can create more problems than it solves.
Why people still set them up:
Protecting an asset — often the family home — for the next generation from relationship property claims. This isn't bulletproof: courts can look through a trust entirely if it isn't run as a genuine, separate entity, or if assets were moved in specifically to defeat a partner's claim.
Providing for a beneficiary with a disability, or who can't manage money well
Business succession planning
Protecting yourself from your own mental illness – some clients spend money poorly when they are unwell, a trust can require your trusted people to approve significant transactions
Some protection around future care costs, though this is far less reliable than it used to be, and needs careful advice
One honest recommendation:
If what you're actually trying to protect is something already owned before a relationship starts — savings, an inheritance, the family home — a contracting-out agreement is usually a far more robust way to do that than a trust.
Trusts can do a lot of things well; reliably shielding pre-relationship property from a future partner isn't always one of them, and I'd rather steer you toward the tool that actually does the job.
Why trusts have become a heavier commitment.
The Trusts Act 2019 tightened up how trusts have to be run. Trustees now have five mandatory duties they can't contract out of — like knowing the terms of the trust and acting in beneficiaries' interests — plus ten further default duties that apply unless the deed says otherwise. Trustees also need to actively consider giving beneficiaries basic trust information, and keep proper records.
On top of that, trustee income has been taxed at 39% — the top personal rate — since April 2024, closing off a tax reason a lot of older trusts were originally set up for.
So does a trust make sense for you?
For a lot of existing trusts, the honest answer these days is no — not because trusts are a bad idea, but because the original reason for setting one up (often tax, or an outdated view of asset protection) no longer holds up, while the ongoing compliance and cost is real.
I regularly review trusts for exactly this question: is this trust still doing a job worth the admin, or is it time to wind it up properly?
If you're setting one up fresh, I'll want to understand what you're actually trying to achieve before recommending a structure — a trust is one tool among several, not a default.
Let’s work together.
Please contact me, Lenny, if you would like to make an appointment or to discuss any of the information on this page.