Ask the Experts: Should I Set Up a Trust?

Protecting wealth, preparing the next generation, and planning for peace of mind

“I have spent 30 years building this business. I do not want it to unravel the moment I step back.”

If you’ve ever had this thought, or wondered what would happen to your assets, property, or business when you're no longer around, you’re not alone. One of the most common questions we hear at Wright Vigar is: “Should I set up a trust?”

The answer? It depends, but when used correctly, a trust can be one of the most powerful tools for:

•         Passing on wealth securely

•         Reducing Inheritance Tax (IHT)

•         Protecting vulnerable beneficiaries

•         Maintaining control over how and when assets are distributed

Let us walk you through what trusts really are (without the jargon), when they work well, when they do not, and how Wright Vigar helps clients like you make the right choice.

What exactly is a trust? (And why does it matter to you?)

A trust is a legal structure where one party (the settlor) transfers assets to another (the trustee) to manage for the benefit of someone else (the beneficiary).

Think of it as a vault:
•         You decide what goes in

•         You choose who holds the key

•         You control who benefits and when

In practice, that might mean:
 •         Placing shares in your business into trust for your children

•         Ringfencing funds for a grandchild’s education

•         Delaying access to wealth until a beneficiary is financially mature

Under 2025 UK rules, trusts can help reduce Inheritance Tax liabilities, provide continuity for family businesses, and offer a level of control that simple gifting cannot.

When Might a Trust Be Useful?

Trusts can be highly effective if:
 
•         You want to reduce your IHT liability: Example: Placing £325,000 into a discretionary trust every 7 years may fall within the Nil Rate Band (2025 rules).

•         You’re planning for business succession: Trusts can help avoid disputes by clearly defining ownership and control.

•         You want to protect assets from divorce or creditors: Especially relevant in second marriages or where beneficiaries are financially vulnerable.

•         You want to stagger inheritance: Trusts allow you to delay access until beneficiaries reach a certain age or milestone.

When Might a Trust Not Be Suitable?

Trusts may not be the right fit if:

•         You’re looking for immediate tax relief: Some trusts attract ongoing charges, such as the 10-year anniversary charge (up to 6% above the Nil Rate Band).

•         You want to keep things simple: Trusts require annual reporting to HMRC and ongoing legal oversight.

•         You don’t have a clear objective: Without a defined purpose, a trust can create confusion and unnecessary cost.

What Types of Trusts Should I Know About?

Here are some common UK trust types (2025 rules):
 •         Bare Trusts – Simple, with absolute rights for beneficiaries

•         Discretionary Trusts – Flexible; trustees decide who benefits and when

•         Interest in Possession Trusts – Income goes to one person, capital to another

•         Trusts for Vulnerable Persons – Offer special tax treatment if structured correctly

Explore GOV.UK’s overview of types of trusts for more detail.

Why you should take action now

Trusts are not just for the ultra-wealthy—they are for anyone who wants clarity, control, and continuity.

Leaving planning too late can result in:
 
•         A higher Inheritance Tax bill for your family

•         Business shares falling into dispute

•         Children receiving assets before they are ready

•         Missed opportunities for strategic gifting (e.g. 7-year IHT planning windows)

With proper advice, trusts can help future-proof your business, protect your values, and give your family peace of mind.

Important 2025 Update: HMRC continues to tighten rules on trust registration. Even bare trusts now require registration via the Trust Registration Service (TRS) unless specifically exempt. Make sure your arrangements are compliant—fines may apply for non-reporting. See: When You Must Register a Trust

Book a trust planning consultation with Wright Vigar

Whether you are just starting to think about succession or are ready to act, our expert advisers will help you decide:
 
 •         If a trust is right for your needs

•         What type of trust is most suitable

•         How to ensure compliance with 2025 UK tax rules

•         How to link your trust strategy with your will, business structure, and wider estate plan

Speak to our team today to explore your options with a confidential consultation.