A trust is a way to keep money or things safe for someone else. You choose people to look after it, and they give it to the right person at the right time. This guide explains how to set up a trust in the UK using clear, simple steps.
What Is a Trust?
A trust is a legal way to hold money, property, or other things.
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The person who sets it up is called the settlor.
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The people who look after it are called trustees.
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The person who gets the money or things is called the beneficiary.
Steps to Set Up a Trust
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Know Why You Want a Trust
People use trusts to:
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Save money for children, grandchildren and future generations
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Help someone who needs support, such as a disabled loved one
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Save tax, or to protect property against assessed medical costs
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Plan for the future
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Pick the Type of Trust
There are different kinds of trusts (click here for more):
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Bare Trust: The beneficiary gets everything when they are old enough.
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Discretionary Trust: Trustees choose who gets what and when.
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Interest in Possession Trust: Someone gets the income from the trust.
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Choose Your Trustees
Trustees must be honest and careful. They manage the trust and follow the rules. The person who creates the trust chooses the first trustees, so it is important to trust these people and to choose people who can do this role well.
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Write the Trust Deed
This is a legal paper that says:
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Who made the trust
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Who the trustees are
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Who the beneficiaries are
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What the rules of the trust are
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What the trust holds
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How it should be used
A solicitor can help you write this. Sometimes, this trust is found within a Will, which makes it a “Will Trust” – where this is the case, the Will is the Trust Deed.
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Put Things Into the Trust
You move money, property, or other items into the trust. This makes it active. You must take certain actions to actually move the items into the trust, and a solicitor can advise you on this.
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Register the Trust
You must tell HMRC (the UK tax office) about the trust. You do this online using the Trust Registration Service, or a solicitor can do this for you.
What About Tax?
Trusts may need to pay tax. This depends on:
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What kind of trust it is
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What it holds
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How it is used
Ask a tax adviser or solicitor for help if you’re not sure.
Summary
A trust helps you protect money or things for someone else. You choose people to manage it, write clear rules, and register it with the government. It’s a useful tool for planning ahead.
How can we help?
Speak to one of our specialist Trust and Estate solicitors today.
Please call us on telephone 0116 212 1000 or 01858 445 480, alternatively complete the free Contact Us form and we will get in touch as soon as possible.
This article has been written by a senior associate solicitor with the assistance of AI.
