Should I Include a Trust for My Children in My Will?
4 minute read
Leaving an inheritance outright isn’t always the safest option for your children.
If you have children, one of the most important questions to consider when making your Will is whether to leave their inheritance to them outright or to place it into a trust. For many parents, a trust is not just advisable. It is the more thoughtful and practical choice.
The good news is that trusts do not have to be complicated to understand, even if the legal details can be intricate to get right. This guide walks you through the key situations in which a trust for your children is worth considering, and explains why getting the structure right in your Will can make an enormous difference to the people you care most about.
Table of Contents
What Is a Trust for Children in a Will?
A trust is a legal arrangement in which assets are held by one or more people (known as trustees) on behalf of one or more beneficiaries. When you include a trust for children in your Will, you are not simply handing over your estate at the point of death. Instead, you are creating a structured arrangement that determines how and when your children benefit from what you leave behind.
Trusts can be tailored in many different ways. They can specify the age at which a child inherits, the purposes for which money can be used, and how trustees should exercise their judgement on behalf of the children in their care. That flexibility is one of the main reasons why including a trust in your Will is often the right decision for parents.
The three core advantages that a trust provides can be summarised simply: protection, control, and flexibility. We will explore each of these themes throughout this guide.
When Children Are Under 18: The Bereaved Minor's Trust
Why Children Cannot Receive Inheritance Directly
Under the law of England and Wales, a child under the age of 18 cannot hold legal title to property or receive an inheritance directly. If you were to leave assets to a minor child without making any provision in your Will, those assets would not simply be handed over. Instead, they would be held on what is known as a bereaved minor’s trust until the child reaches the age of 18.
This is not necessarily a bad thing. A bereaved minor’s trust is a recognised legal structure that provides a degree of protection during the child’s minority. However, the terms of such a trust are determined by statute rather than by your own wishes, which means you have limited control over exactly how the money is managed during that period.
Taking Control Through Your Will
Even though a bereaved minor’s trust arises automatically, you still have the opportunity to shape it through the terms of your Will. For example, you can specify whether the capital and income from the trust should be saved and invested on the child’s behalf, or whether income should be applied towards the child’s day-to-day needs, maintenance, and education in the meantime.
Making these decisions in your Will, rather than leaving them entirely to the discretion of trustees or the default position in law, gives you considerably more control over your child’s financial future. It also reduces the risk of disagreement or uncertainty among the trustees you appoint.
Even where a bereaved minor’s trust arises automatically by law, the specific provisions you include in your Will can make a significant difference to how the trust operates in practice. A carefully drafted Will is always preferable to relying on default legal rules.
Should You Let Your Child Inherit at 18?
Reaching adulthood at 18 does not automatically mean a young person is ready to manage a large sum of money wisely. For many parents, the idea of a child inheriting a substantial estate at 18 is genuinely concerning, and understandably so.
A trust in your Will allows you to delay the point at which your child receives full access to their inheritance. Common ages chosen by parents include 21 and 25, though you are free to set any age you feel is appropriate. Some parents prefer a staged approach, for example, releasing a portion at 21 and the remainder at 25, which allows the child some financial independence while retaining a degree of protection.
The important point is that the decision should be yours, made thoughtfully in advance, rather than being determined by a default legal rule. A well-drafted Will gives you that choice. A basic or DIY Will often does not.
Using a Trust to Direct How Funds Are Spent
Earmarking Money for Specific Purposes
One of the most practical uses of a children’s trust in a Will is to direct that funds should be used for specific purposes rather than simply being available for general spending. Common examples include education, university fees, a deposit on a first home, or the general maintenance and welfare of the child while they are growing up.
By including these directions in your Will, you give trustees clear guidance about your intentions. Trustees can then exercise their powers in a way that reflects your values and priorities, rather than making entirely independent decisions about what is in the child’s best interests.
Guarding Against Financial Immaturity
Even where a child is technically an adult, financial immaturity is a real risk that should not be dismissed. A young person who inherits a significant sum at 18 or 21 may face pressure from friends, fall prey to poor investment schemes, or simply spend in a way that they will later regret.
A trust that releases funds gradually, or only for specific approved purposes, provides a valuable buffer against these risks. It is not about distrust of your child. It is about giving them the best possible chance of benefiting meaningfully from what you leave behind, rather than burning through it quickly in circumstances you could not have foreseen.
Parents often feel uncomfortable discussing this issue, but including protective provisions in a trust is one of the kindest things you can do for a child. It is far easier to build in protection at the drafting stage than to wish later that you had done so.
Trusts in Blended Families
If you are in a blended family, the question of how to provide for your children becomes considerably more complex. Many parents in this situation have children from a previous relationship as well as children (or stepchildren) from their current one. Each set of children may have different needs, different relationships with the surviving parent, and different expectations.
Without careful planning, there is a real risk that children from a previous relationship are unintentionally disinherited after your death. If you leave your estate to a surviving partner outright, they are under no legal obligation to maintain the provisions you intended for your children. They may remarry, alter their own Will, or face financial pressures that change the picture entirely.
A trust in your Will can ensure that your own children’s inheritance is ring-fenced and protected, regardless of what happens after your death. This might work in conjunction with a life interest trust that allows your surviving partner to benefit from the estate during their lifetime, while preserving the underlying capital for your children as the ultimate beneficiaries.
Protecting Against Other Risks: Bankruptcy and Divorce
Parents often focus on when and how their children will receive their inheritance, without considering the risks that might affect what happens to those assets once they have been passed on. Two of the most significant risks in this regard are bankruptcy and divorce.
Protecting Against a Child's Bankruptcy
If your child were to become bankrupt after inheriting from your estate, an outright gift of assets would leave those assets exposed to their creditors. The inheritance would effectively be swept up in the bankruptcy proceedings, potentially leaving your child with nothing.
A properly structured trust can provide a degree of protection against this outcome. Where assets are held in trust and the trustees have discretion over whether and how to apply the funds, those assets may not form part of the bankrupt child’s estate in the same way. This is a nuanced area of law, and the protection available depends on how the trust is structured, but it is a compelling reason to take professional advice when drafting your Will.
Protecting Against Divorce Proceedings
Similarly, if your child is in a relationship that later breaks down, an inheritance they have received outright could be taken into account as part of the matrimonial assets in any divorce settlement. This is particularly relevant where the child has commingled the inherited funds with joint assets, but it remains a risk even where the funds have been kept separate.
A discretionary trust can provide some insulation against this risk, because the child’s interest under the trust is not an absolute entitlement in the same way as outright ownership. Again, the degree of protection depends on the trust’s structure and the circumstances of the case, but many parents find this consideration alone sufficient reason to include a trust in their Will.
Trusts for Vulnerable Children and Children with Additional Needs
Where a child has a disability, a long-term health condition, or additional needs of any kind, the question of how to provide for them through your estate requires particularly careful thought.
A child who receives means-tested benefits such as Universal Credit, Personal Independence Payment, or other state support may find that an outright inheritance disrupts their entitlement to those benefits. In many cases, receiving a lump sum above a certain threshold triggers a reassessment, and the child may lose support they depend on for their daily life, at least until the inherited funds have been spent down.
A carefully structured trust can help to avoid this outcome. A discretionary trust, for example, gives trustees the power to apply funds for the child’s benefit without the child holding an absolute entitlement to the capital. This can preserve means-tested benefit eligibility while still ensuring that the child benefits from your estate in a meaningful way.
There are also specialist trust structures available, including what is sometimes called a vulnerable beneficiary trust or a disabled person’s trust, which can attract favourable tax treatment in certain circumstances. If your child has additional needs, this is an area where specialist Will-drafting advice is particularly important.
If your child receives means-tested benefits or has a disability, it is essential to take professional advice before finalising your Will. An inheritance that is not properly structured could inadvertently harm your child’s financial position rather than help it.
Creating Flexibility: The Discretionary Trust
Not every parent wants to specify precise conditions and ages in advance. Life is unpredictable, and the needs of your children may be very different from what you can anticipate at the time of making your Will. In these circumstances, a discretionary trust can be the most appropriate solution.
Under a discretionary trust, the trustees have broad powers to decide how and when funds are applied for the benefit of the beneficiaries. They can respond to circumstances as they arise, rather than being bound by fixed rules set years or even decades earlier. This might mean supporting a child through higher education, helping them onto the property ladder, or providing assistance during a period of illness or unemployment.
The key to making a discretionary trust work well is choosing the right trustees. The people you appoint should be trustworthy, sensible, and willing to act in the long-term interests of your children. It is also helpful to leave a letter of wishes alongside your Will, which sets out your hopes and intentions for the trust, even if those wishes are not legally binding.
Conditional Inheritance: Linking Release to Milestones
Some parents prefer to tie the release of capital to specific milestones rather than simply a fixed age. Common conditions include graduating from university, reaching a certain age, getting married, or purchasing a first home. These conditions give trustees a clear framework and can incentivise positive outcomes, while still allowing trustees some discretion in how they respond to individual circumstances.
Conditions of this kind need to be carefully drafted to avoid unintended consequences. For example, a condition tied to marriage would not be appropriate where you have children who may not wish to marry, or who are in same-sex relationships that might not have been equally recognised at the time you made your Will. Professional drafting is essential to ensure that the conditions you include achieve exactly what you intend.
How Wise Owl Wills Can Help
At Wise Owl Wills, we work with parents at every stage of life to help them make the right decisions for their children’s futures. Whether you have young children, adult children, children with additional needs, or a complex blended family, we can help you understand the options available and draft a Will that reflects your circumstances and your wishes.
Including a trust in your Will is not something that should be attempted with an off-the-shelf template. The structure of the trust, the choice of trustees, the drafting of any conditions, and the interaction between the trust and other provisions in your Will all require careful professional attention. A Will that has been poorly drafted can fail to achieve its purpose, or worse, create disputes and uncertainty for the very people you are trying to protect.
We take the time to understand your family, your concerns, and your long-term intentions. We then draft a Will that gives your instructions the legal clarity and force they deserve.
If you would like to discuss whether a trust for your children is right for your Will, please get in touch with us today. We offer a friendly, no-pressure initial conversation and would be very happy to help.
Frequently Asked Questions
Do I need a trust for my children in my Will?
You do not legally have to include a trust, but it is often advisable. If your children are under 18, their inheritance will automatically be held on trust until they come of age. If you want to delay inheritance beyond 18, protect against risks such as divorce or bankruptcy, or make provision for a vulnerable child, a trust in your Will is the most effective way to achieve those goals.
What happens to my children's inheritance if I do not have a Will?
If you die without a Will, your estate is distributed according to the rules of intestacy. Children under 18 still cannot receive their inheritance directly, but the terms of the resulting trust are determined by law rather than by your wishes. You have no control over the age at which they inherit, how funds are managed, or what they can be used for. Making a Will is the only way to retain that control.
At what age should I set for children to inherit under my Will?
There is no single right answer, and the appropriate age will depend on your own assessment of your children’s maturity and circumstances. Common choices are 21 or 25, and some parents opt for a staged release, for example, half at 21 and the remainder at 25. Your Will can be as flexible as you need it to be, and a Will specialist can help you think through the options.
Who should I appoint as trustees for a children's trust?
Trustees should be people you trust implicitly to act in your children’s best interests. They must be willing to take on the responsibility, which can last for many years, and should ideally have a degree of financial common sense. Many people choose a combination of a close family member and a professional trustee or solicitor to provide both personal understanding and professional accountability.
Can a trust in my Will protect my child's inheritance from divorce?
A well-structured discretionary trust can provide some protection against a child’s inheritance being treated as a matrimonial asset in divorce proceedings, because the child does not hold an absolute entitlement to the capital. The degree of protection depends on the trust structure and the specific circumstances of the case. Professional advice is recommended if this is a concern.
What is a bereaved minor's trust?
A bereaved minor’s trust is a trust that arises automatically under English law when a child under 18 inherits from a parent who has died. The inheritance is held on trust until the child reaches 18, when it is paid out in full. The terms of the trust are set by statute, but the provisions in your Will can influence how the trust operates during the child’s minority.
Can I use a trust to protect my child's means-tested benefits?
Yes, in many cases. A discretionary trust or a specialist disabled person’s trust can allow trustees to apply funds for your child’s benefit without the child holding an absolute entitlement to the capital. This can help to preserve eligibility for means-tested benefits. The appropriate structure depends on your child’s specific circumstances and benefits, so specialist Will-drafting advice is essential.
Do I need a solicitor to include a trust in my Will?
You do not legally need a solicitor, but trusts within Wills require precise drafting to be legally effective and to achieve your intentions. Errors in drafting can lead to disputes, unintended tax consequences, or a trust that simply does not work as you intended. Using an experienced Will drafter, such as Wise Owl Wills, gives you the confidence that the document has been prepared correctly.
Disclaimer
This article is intended as general information only and does not constitute legal advice. The information refers to the law of England and Wales. Tax thresholds and legal rules are correct at the time of writing but are subject to change. We recommend that you seek professional advice regarding your own circumstances.
Bio
This article was written by Stephen Rhodes. Stephen was called to the Bar of England and Wales in 1999 and brings over 25 years of in-house experience working with solicitor firms across the Manchester area, with a specialism in Wills and Probate. He now focuses exclusively on will drafting, helping his clients ensure their loved ones are taken care of exactly as they would wish.