Why more investors are turning to trusts – and why they are not as complicated as you think

Amy Woolliscroft5th October 2026

Trusts are often viewed as something reserved for wealthy families with complicated financial arrangements. But for investors considering how to pass wealth to the next generation, they can be a practical tool, particularly as part of inheritance tax planning.

A trust is a legal arrangement that allows assets to be placed under the control of trustees, who manage them for the benefit of named beneficiaries. This can provide greater control over how family wealth is managed and ultimately distributed.

For inheritance tax planning, trusts can be particularly useful because, depending on the type of trust and the circumstances, putting assets into trust may reduce the value of an estate for inheritance tax purposes. However, transferring assets into a trust does not automatically remove them from an estate, and different trusts are subject to different tax rules.

There can also be advantages where someone wants to provide financial support to children or grandchildren without giving them unrestricted access to assets immediately. Trustees can manage investments and make distributions according to the terms of the trust and the needs of beneficiaries.

Mark Hawksford DipPFS, Head of Operations at Accession, says: "The growing interest in trusts reflects wider concerns around inheritance tax and the desire to plan ahead rather than leave decisions until later in life. However, there can be tax charges when assets are transferred into certain trusts, as well as ongoing reporting and administrative responsibilities."

The key point is that trusts are not necessarily as complicated as they appear. While the legislation can be complex, the underlying concept is straightforward: assets are placed under trusteeship with rules governing how they are managed and who can benefit.

Used appropriately, a trust can form an important part of a wider inheritance tax and family wealth strategy, although professional advice is essential before assets are transferred.

We also know that investment values can fall as well as rise so returns aren't guaranteed, and trusts incur legal, tax, and trustee responsibilities, so this must all be considered. Over shorter periods, market fluctuations mean you could get back less than you invest. Many people invest for the longer term because investments have historically offered higher long term returns than cash savings — but outcomes will always depend on time, markets and individual circumstances.

The right approach depends on factors such as your age, health, income needs, the size of your estate, and who you want to benefit. Tax treatments and regulations are also subject to change.

If you are considering how to protect and pass on your wealth, it is important to understand how trusts could fit into your wider inheritance tax planning. Our advisers can help you assess your circumstances, explain the options available and determine whether a trust could be appropriate for you and your family. Get in touch with us today to discuss your inheritance tax planning and find out how we can help.

Trusts are not regulated by the Financial Conduct Authority.

SJP approved 5/10/2026