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What are the differences between a Will trust and a living trust?

Grandparents with a young granddaughter wondering what are the differences between a will trust and a living trust.

There are a variety of different types of trusts available, suitable for different family circumstances and requirements. There are trusts in Wills and living (“lifetime”) trusts. So what are the differences between a Will trust and a living trust?

Before you read on, it’s a good idea to understand the basic ideas behind trusts in general, which are explained in this longer article: Trusts in estate planning.

What is a Will trust?

As the name suggests, a Will Trust is a trust written into a Will. It could be one of several different types. Unfortunately, it’s not easy to tell from the name alone when you read about a Trust online.

You’ll come across names like life interest trust, discretionary Will trust, and protective property trust, to name but a few. The more flexible types of Will trust, which are the discretionary trusts, can adapt to changing circumstances but may not be the best choice for everyone.

The important thing to know is whether or not these trusts are written into the Will itself? If so, there’ll be a section of the Will devoted to the trust. The trust may have a subheading to distinguish it from the rest of the Will, but not necessarily.

The key thing to remember is that a Will only comes into effect after you’ve passed away. So nothing happens with the trust until then. This is worth bearing in mind if you’re looking for the trust to protect something during your lifetime. Clearly, that is not possible because the protection won’t kick in until after your death.

Once you have passed away, your executors apply for a grant of probate and can then formalise the trust. Like any kind of trust, it’ll have trustees and beneficiaries. These will usually be listed in the Will, although some allow the trustees to add beneficiaries. Certain kinds of trust are flexible. Your instructions of what you want your trustees to do with your assets are contained in a separate letter that you can change at any time.

And what exactly are those assets? They are written into your Will. So for example, it could be your share of a property or money. But none of this needs to be formalised until after your death. If there is a trust is set up to hold £50,000 pounds, for example, the trustees need to set up an account to hold and manage it for the benefit of the beneficiaries. The trustees might be the very same people as the executives named in the Will and, if this is the case, it’s stated in the Will.

What is a living trust?

A living trust, also called a lifetime trust is one that you set up while you alive, i.e. during your lifetime. Assets are placed (the legal word is “settled” into the trust immediately, so unlike a Trust in a Will, the trust itself is up and running whilst you’re still alive.

Assets go into the trust to be managed by the trustees. Every year the trustees hold an annual meeting and record the minutes to describe what happened, just as you would for a company board, for example.

Initially, a lifetime trust costs a lot more to set up. This is because it’s a reserved activity that only solicitors can perform. For this reason, the initial costs are higher than with a Will trust. However, many Will writers and estate planners offer this service as well. They order documents once they’ve had a meeting with you and provide them for you to sign.

In practice, many people set up a trust at the same time as they’re making a Will. This is especially important for married couples and civil partners because they may need to take advantage of a special type of Will that goes along with the lifetime trust.

The advantage too is that the lifetime trust is already set up when you pass away. so there’s no more setting up to do and therefore no more cost at that stage.

A lifetime trust helps your children, grandchildren and other beneficiaries in the following ways. Their inheritance remains protected and ringfenced if:

  • They’re going through a divorce
  • They’re bankrupt or facing bankrupcty
  • You get divorced and meet someone new
  • You get divorced and remarry

In addition, some lifetime trusts avoid probate. If you put your house into one of these trusts, there is no need for that property to go through estate administration with the rest of your assets in your Will.

This means that there won’t be a delay of several months before a house can be sold. The trustees can sell is straight away so that the beneficiaries receive their inheritance.


In this article, we asked what are the differences between a Will trust and a living trust? The answer is that Will trusts are relatively low cost. In my experience, this provides more protection than a basic Will. Some Will trusts are more flexible than others.

However, Will trusts won’t protect your assets from anything that happens while you’re still alive. This is because what goes into the Will trust is some, or all, of what you own at the time of your death. There’ll also be an extra cost during estate administration (probate) stage to formalise the trust.

For maximum protection, lifetime trusts (“living trusts”) are recommended. You put (“settle”) assets into the trust whilst you are still alive. This guarantees that they’ll be passed on and also sidesteps probate. This could be useful if your executors wish to sell a house quickly, for example.

The information contained in these articles is for general interest purposes only. We take every precaution to ensure that the information is correct at the time of publishing but errors can occur. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in the information. Bristol Wills & Estate Planning Ltd is not responsible for any errors or omissions or for any results obtained from the use of this information. You should never rely on the information in these articles as a substitute for professional legal advice, whether from Bristol Wills & Estate Planning or any other legal service or professional.

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