Why people use trusts

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note explains the key reasons why people use trusts during their lifetime and on death.

Trusts are mainly used to pass assets and wealth down through the generations. Trusts have been used for many years to protect assets, control their management and to control how, when and if the assets are transferred to beneficiaries. Tax is also an important factor and trusts can be used as part of IHT planning.

For an explanation of the parties to a trust and the terms used when talking about trusts, see the What is a trust? guidance note. The Creating a trust guidance note sets out further details of how a trust is established.

Control

Often the settlor of a lifetime trust will appoint themselves as a trustee and thus enables them to retain control over the assets. Alternatively, they may appoint a friend or relative or a professional in lifetime or in their Will alongside a letter of wishes detailing how they would like the assets dealt with.

Using a trust allows

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