Trusts: Myths, Facts, and Benefits

If you are planning your estate, you have likely come across the trusts. However, trusts are surrounded by myths that discourage people from establishing them, causing them to miss out on the wealth of benefits that they offer. Read on to learn more about the myths of trusts and what the facts are. 

Myths About Trusts 

There are many misconceptions about trusts that stop people from opening them. Some of the most common ones include:

  • Trusts are only for the ultra-wealthy – this is the biggest myth out there and the most wrong one. Anyone can take advantage of trusts and can use them for a variety of reasons – you don’t have to have millions in the bank to use them efficiently. Many people use trusts to decide when their beneficiaries get access to funds or assets or protect specific assets. 
  • You can’t access assets that you put into a trust – some trusts indeed require that you give up all rights to the assets you place inside them, but many other trusts allow you to retain full access to your assets while you are alive. Family protection trusts are one such option. 
  • Trusts are complicated and expensive – although trust law is complex, with The Planning Bee, it’s smooth sailing. Using expert legal services from our paralegals means that you avoid mistakes that could be incredibly expensive in the future. While there will be an initial set-up cost, a trust often pays for itself several times over, as it can save a lot of money from Inheritance Tax (IHT) and reduce probate fees and inheritance challenges. 
  • You don’t need a trust if you have a Will – this is not the case. Trusts and Wills can work together to make the most of your estate for your loved ones and reduce problems such as inheritance disputes and high IHT bills. 

Benefits of Trusts 

Trusts are for everyone and they have some great advantages! Establishing a trust can have many benefits for both you and your loved ones, which include:

  • Greater control – trusts give you an extra element of control of what happens to your assets after you pass away. For example, you may choose to grant a beneficiary a gift only after they reach a certain age – while you could request it in your Will, there is no guarantee that your wishes will be adhered to. 
  • Avoiding probate – probate can be an incredibly long, costly process that prevents your loved ones from gaining access to your estate for a long time. 
  • Protecting assets – with a trust in place, there is less risk of assets being lost by beneficiaries who are divorcing their spouse or struggling with bankruptcy. Trusts can also protect assets from being sold to pay for high care home fees if residential care is needed. 
  • Saving Inheritance Tax – trusts ensure that your assets are held outside of your estate, meaning that they cannot be included when IHT is being calculated on your estate. This allows you to pass on more of your money to your loved ones. 
  • Avoiding sideways disinheritance – sideways disinheritance can cause a lot of strife in families. If you pass away and leave your estate to your spouse, and then they remarry, your estate and assets may pass to their new partner and potentially their children after they pass away. This can lead to costly, drawn-out inheritance disputes from family members. However, establishing a trust that your children and other family members benefit from while still ensuring that your spouse is taken care of in your Will can avoid this issue. 

In some cases, a trust can also be used to mitigate high care fees. Many people may have to sell their homes to afford care homes, but a protective property trust could remove this problem. In a protective property trust, you and your partner must become tenants in common, owning 50% of the home rather than 100% between you. 

You and your partner can then leave your half of the house to your beneficiaries. If one person needs care in the future, when the local council is assessing your ability to pay fees they will not be able to count the share that is still held in trust, so at least 50% of the house’s value is protected for your loved ones. 

These benefits are why more people choose to establish trusts when planning their estate. 

How Trusts Work

There are many different types of trusts that work in slightly different ways. However, generally, trusts work by placing your assets under the control of your selected trustees. These assets are then used for the benefit of chosen beneficiaries.

The assets you can place into a trust can vary, ranging from property to money and investments. The settlor – the person who places the assets into the trust – can then lay out the terms for how the trustees will distribute them to the beneficiaries. This is usually outlined in the trust deed, which is legally binding and ensures that the assets are used exactly how the settlor wants them to be. 

When choosing trustees to manage your assets, make sure they are capable and have the best interests of both yourself and your beneficiaries at heart. It is wise to appoint two or three trustees who you know will be able to manage a trust efficiently. 

You can set up trusts to reimburse trustees for their expenses, as well as appoint professional trustees who are experienced in managing trusts. However you choose to manage your trust is up to you entirely.


Trusts are excellent tools to incorporate into your later life plans. Do not let the false myths and expectations about trusts discourage you – they are incredibly useful to have in place!

Contact The Planning Bee today if you have any questions about trusts and estate planning. Our expert paralegals have decades of experience and are available to help you with all your needs. 

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