A will is the foundation of any estate plan. But it has two characteristics that, for some families, are real problems. First, it hands everything over at once — the moment probate is granted, an eighteen-year-old beneficiary can receive a life-changing sum outright. Second, it only takes effect after probate — which can mean months of delay before anyone receives anything. A trust is designed to solve both.
Young children
If both parents die while children are young, a will can name a guardian to care for them — but the inheritance still needs managing. Without a trust, funds may have to be released through the court, and whatever remains is handed to the child outright at the age of majority. A trust lets you appoint a trustee to manage the money, release it for education and needs along the way, and stage the capital — say a portion at 21, a portion at 25, the balance at 30 — rather than all at once.
Vulnerable beneficiaries
A beneficiary with special needs, a disability, or difficulty managing money is often best protected by a trust rather than a direct gift. The trustee holds and applies the inheritance for their benefit for life, which can also protect the funds from being lost or exploited.
Business owners
For a company owner, the delay is the danger. Until a grant is obtained, the shares may sit in limbo and nobody can exercise the rights attached to them — the company can be paralysed for months. Holding the shares in a trust, alongside a shareholder or buy-sell agreement, lets control pass immediately and keeps the business running. Business succession planning exists precisely for this.
Living trusts and probate
Assets placed in a living trust during your lifetime are already owned by the trust, so they do not form part of the estate that must go through probate. That can mean your family is supported in weeks rather than months. It is one of the main reasons families use them.
The right tool for the job
None of this replaces a will — it complements it. Most good estate plans are a will and one or more trusts, designed to work together. The question is never "will or trust"; it is "what does this family, and these beneficiaries, actually need".
General information only. See our trusts service or speak to us about protecting a young child, a vulnerable heir or a business.
