Discretionary Trusts in Wills: How They Protect Your Family and Assets

Why This Matters More Than You Think

What happens to your money, property, and possessions when you die? Many people assume their Will alone will protect their loved ones. But here’s the reality: around 54% of UK adults don’t even have a valid Will, and even when they do, it doesn’t always guarantee protection against risks like care costs, addiction, or vulnerable beneficiaries.

That’s where a Discretionary Trust in a Will comes in. It gives you more control, more protection, and peace of mind that your beneficiaries inherit in the right way, at the right time.

What Is a Discretionary Trust in a Will?

A Discretionary Trust is a type of trust that gives your trustees the power to decide how and when your beneficiaries receive their inheritance.

Here’s how it works:

• You set it up in your Will.

• When you pass away, the Trust is automatically created.

• Your trustees (people you appoint) look after your assets.

• They have distributive discretion — meaning they can choose whether to give money directly, buy assets (like a car or house), or wait until the right time.

  
  

You can also add a Letter of Wishes, guiding trustees on how you’d like the inheritance to be handled (e.g. money released at certain ages, or funds set aside for education).

Why Should You Consider a Will-Based Discretionary Trust?

Here are real-life situations where a discretionary trust makes all the difference:

• Protecting Vulnerable Beneficiaries

Not everyone can safely inherit a lump sum. If your child struggles with addiction or mental health issues, trustees can release funds responsibly—ensuring money supports recovery, not harmful behaviour.

• Supporting Loved Ones Who Struggle with Finances

Some beneficiaries may not be great with money. Instead of handing them a lump sum, trustees can manage and distribute funds sensibly.

• Protecting Those on Benefits

If a beneficiary receives means-tested benefits, a direct inheritance could push them over the threshold and cause them to lose entitlement. A trust allows assets to be managed without affecting their benefits.

• Shielding Assets from Care Costs

It’s estimated that 1 in 2 people over 65 will need residential care. Care costs can eat away at family inheritances, but a discretionary trust can help protect your share of assets so they pass to your children instead of being used for fees.

• Safeguarding Young Children

Trusts allow you to set specific rules—such as inheritance being used for education, housing, or milestones (e.g. receiving money when turning 25).

• Guarding Against Undue Influence

If you worry that a beneficiary’s partner or relationship could pressure them into handing over money, a trust adds protection. Trustees oversee distributions so inheritance isn’t misused.

• Flexible and Adaptable

Life changes. A Will-based discretionary trust doesn’t come into effect until death, meaning you can amend your Will as often as needed. Trustees can also add new beneficiaries (e.g. future grandchildren).

Should You Set One Up?

A Will-based Discretionary Trust is often:

• More affordable than a Family Protection Trust

• Flexible, amendable, and future-proof

• A powerful way to protect your family’s inheritance

  
  

Next steps:

1. Speak with an advisor who can review your circumstances.

2. Decide who your trustees should be (trusted family or professionals).

3. Create your Will with the trust provisions included.

Take The Next Step To Securing Your Future