Head of our Personal and Family practice, with over 25 years of private client experience
Head of Personal & Family and PartnerMark Stewart
An accredited specialist in Trust Law by the Law Society of Scotland
PartnerSusanne Batchelor
A ranked lawyer with accountancy expertise
PartnerNorman Kennedy
Trusts can play an important role in tax planning and asset protection, for people with varying levels of wealth. Trusts offer a versatile solution for managing wealth, ensuring assets are safeguarded, distributed efficiently, and preserved for future generations.
They can be used to control how assets are passed to beneficiaries, protect wealth from external risks such as divorce or bankruptcy, support family members who may not yet be ready to manage assets, and optimise tax planning. Our experienced trust lawyers provide tailored wealth planning services to help establish and administer the most suitable trust structure for your needs – including those designed for children, individuals with disabilities and personal injury claimants.
Expertise in trusts
Choosing Brodies for your trust matters ensures you receive expert guidance tailored to your unique circumstances. Trusts are commonly used by individuals as part of their ongoing succession planning, but they can also be an effective means of securing tax and financial advantages – particularly in situations involving young children, blended families and second marriages. Our experienced trust lawyers can help you navigate the complexities of trust law, ensuring that your assets are protected and distributed according to your wishes.
Trusts are not just for wealthy individuals; they can be valuable tools for families of all sizes and financial backgrounds. We provide clear, practical advice, helping clients make informed decisions that secure their family's future while making the most of the available legal and financial strategies.
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Types of trusts
In the UK, trust law varies between jurisdictions.
Scotland
Trust law in Scotland is governed by a distinct legal system rooted in civil law principle. Scottish trusts are often more structured in terms of statutory guidance, offering greater clarity for trustees and beneficiaries. The law also allows for more flexible succession planning, especially in family arrangements.
Types of Scottish trusts
Bare trust
Trustees hold the assets for a named beneficiary. The beneficiary has an absolute right to both the income and capital of the trust. Once they reach the age of legal capacity in Scotland, 16 years old, they can request that the assets be transferred to them at any time.
Discretionary trust
Under Scots law, a discretionary trust is one in which the trustees have the power to decide how trust income and capital are distributed among a group of potential beneficiaries. The beneficiaries do not have a fixed entitlement; rather, the trustees exercise discretion over who benefits and to what extent.
Liferent trust
This type of trust gives a beneficiary (the liferenter) a right to receive income from the trust assets, or to use the assets, for a specified period—often their lifetime. After this period, the assets pass to another beneficiary, known as the fiar.
Charitable trust
A charitable trust in Scotland is established for purposes recognised as charitable under Scots law, such as the relief of poverty or the advancement of education. The trust must operate for the public benefit and is regulated by the Office of the Scottish Charity Regulator (OSCR).
Trusts for vulnerable beneficiaries – including bereaved minors
These trusts are designed to protect and manage assets for vulnerable individuals, such as bereaved children or those with disabilities. Trustees are responsible for ensuring that the beneficiaries' needs are met and that the assets are preserved for their benefit.
Non-resident trusts (governed by Scots law)
Non-resident trusts are trusts that are governed by Scots law but where the trustees or beneficiaries are based outside Scotland. These trusts may be subject to different tax and reporting requirements due to their cross-border nature.
Personal injury trust
A personal injury trust is set up to hold compensation received following a personal injury. The trust helps protect the beneficiary’s entitlement to means-tested benefits and ensures the funds are managed appropriately for their long-term care and support.
England & Wales
Trust law in England and Wales is based on common law and shaped by centuries of judicial precedent. The system relies heavily on case law to interpret duties and beneficiary rights, which can offer flexibility but may also lead to uncertainty. Trusts in England and Wales are widely used for tax planning, asset protection and managing wealth across generations.
Types of trust in England & Wales
Bare trust
A bare trust holds assets for a beneficiary who has an immediate and absolute right to both the capital and income. The trustee acts as a nominee, and the beneficiary can demand the assets at any time once they reach adulthood (which in England & Wales is the age of 18).
Discretionary trust
In a discretionary trust, trustees have the power to decide how and when to distribute income or capital among a group of beneficiaries. Beneficiaries do not have a fixed entitlement; distributions are made at the trustees’ discretion.
Interest in possession trust (life interest trust)
This type of trust gives a beneficiary a present right to the income from the trust assets (often for their lifetime), while the capital passes to other beneficiaries (known as the remaindermen) after their interest ends.
Charitable trust
A charitable trust is established for purposes recognised as charitable under English law, such as alleviating poverty or advancing education. The trust must operate for the public benefit and is regulated by the Charity Commission.
Trusts for vulnerable beneficiaries – including bereaved minors
These trusts protect and manage assets for vulnerable individuals, such as bereaved children or those with disabilities. Trustees must act in the best interests of the beneficiaries, ensuring their needs are met.
Protective trust
A protective trust is designed to provide income to a beneficiary while protecting the capital from creditors or bankruptcy. If the beneficiary tries to assign their interest, the trust typically converts to a discretionary trust.
Non-resident trusts (governed by the law of England & Wales)
These trusts are administered under English law, but either the trustees or beneficiaries are based outside England and Wales. They may be subject to special tax and reporting rules due to their cross-border nature.
Personal injury trust
A personal injury trust holds compensation awarded for personal injury, helping to protect the beneficiary’s entitlement to means-tested state benefits and ensuring the funds are managed for their long-term needs.
Setting up a trust with Brodies
Our trust practitioners and accredited specialists can set up and manage whatever type of trust is best suited to your needs. We offer a complete range of trust services, including trust setup, administration and trust compliance.
What are your goals?
Think about what you’d like your trust to achieve—whether it’s protecting assets, securing your family’s future, or giving to charity.
Choosing the right trust
We can support on helping you decide which type best fits your needs. Options include discretionary, fixed, or charitable trusts.
Select trustees
Appoint trusted individuals or a professional service. Trustees will manage the assets according to your wishes and the terms of the trust.
Draft the trust deed
With support from our legal experts, create a formal document outlining your intentions, naming beneficiaries, and setting management rules.
Transfer assets
Move assets into the trust so it can start working for you and your beneficiaries.
Register or notify
Depending on your location, you may need to register the trust or inform authorities. We’ll guide you through any local requirements in UK jurisdictions.
Get ongoing advice
Our legal and financial professionals are here to ensure your trust stays compliant and effective, so you can have peace of mind.
Trusts key highlights
- Qualified in Scotland, England and Wales to act on cross-border matters.
- Mark Stewart is Convenor of the Law Society of Scotland’s specialist accreditation panel for Trust Law.
- We administer over 1000 trusts.
Benefits of establishing a trust
Establishing a trust offers a range of benefits, including providing greater control over the distribution of assets, safeguarding wealth for future generations, and potentially reducing inheritance tax liabilities. Trusts can help ensure that assets are managed and transferred according to the settlor’s wishes, protecting beneficiaries such as children or vulnerable family members. Additionally, trusts can offer privacy, as their details are not always part of the public record, and may provide protection from creditors or legal claims.
Trust compliance services
Managing trust compliance can feel overwhelming, especially as regulatory requirements continue to evolve. With the support of specialist advisers, the process becomes much clearer. Our in-house trust compliance team is here to manage the compliance process on your behalf, easing the administrative burden and giving you greater peace of mind.
We provide a full trust compliance service to support trustees in meeting their ongoing legal and reporting duties. From HMRC trust regulation and annual returns, to record-keeping, reporting changes and ensuring ongoing regulatory compliance, we take care of the detail so you can focus on what matters most.
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Our centralised trust compliance support means:
- Peace of mind that your trust is fully compliant
- Reduced time and risk for trustees and advisers
- Efficient, proactive service from a team who understands the wider trust landscape.
Whether you’re a trustee of a family trust or part of a more complex trust arrangement, our team is on hand to provide clear, practical compliance support across all types of trust structures.
Frequently asked questions on trusts
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How to choose the right trust for your needs?
When choosing the right trust for your needs, it is important to consider your objectives and the circumstances of your beneficiaries. Reflect on whether you require flexibility in asset distribution, wish to support charitable causes, or need to provide for vulnerable individuals. Discretionary trusts offer adaptability, allowing trustees to decide how and when beneficiaries receive assets, while fixed trusts set out specific entitlements for each beneficiary. Charitable trusts are designed for philanthropic purposes and come with their own regulatory requirements.
Consulting with our legal and financial professionals can help you understand the implications of each trust type, including tax considerations, administrative responsibilities, and the long-term impact on your estate. Carefully assess the level of control you wish to retain, the potential risks, and the future needs of those you intend to benefit before making a final decision.
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Do you need a lawyer to set up or manage a trust?
We strongly advise trustees to seek professional guidance to fully understand their responsibilities and ensure they meet their legal obligations. Trust administration can be challenging, and proceeding without expert legal advice may lead to unintended issues.
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Where can I get advice on trusts?
If you have any queries about trusts – whether you are currently involved with one or considering setting up a new trust – please get in touch with one of our trust lawyers for advice and support.
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Who is the best person to manage a trust?
The best person to manage a trust, known as a trustee, should be someone who is trustworthy, financially responsible, and capable of making impartial decisions in line with the settlor’s wishes. Often, family members, close friends, or professional advisors such as solicitors or accountants are chosen for this role. It can be beneficial to appoint more than one trustee to ensure checks and balances and to provide a broader range of expertise. Ultimately, the choice depends on the complexity of the trust and the nature of the assets involved, as well as the needs of the beneficiaries. Sometimes it will be appropriate for the settlor to be one of the trustees.
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What does trust compliance involve?
Trust compliance covers legal and regulatory obligations on trustees, including the record-keeping and reporting duties imposed on trustees by UK law, which can include foreign reporting elements. This might require trustees to report changes in trustees, beneficiaries, or trust assets to relevant authorities, and the penalties for failing to comply can be serious. Remaining up to date with these requirements helps ensure the trust operates smoothly and remains protected under the law.
