Will vs Trust: Probate, Privacy, Inheritance Tax and Which Suits You

Will vs trust: the short answer

A will is an instruction that takes effect when you die; a trust is an arrangement under which trustees hold assets for beneficiaries, either from now (a lifetime trust) or from your death (a will trust, written into the will). Everyone with assets or children needs a will. A lifetime trust is a specialist tool for giving wealth away while keeping some control, or for protecting a beneficiary who should not hold assets outright.

Issue	Will (including a will trust)	Lifetime trust
When it takes effect	On death; can be changed at any time before then	When assets are transferred to the trustees
Probate	Assets in your sole name usually need a grant of probate	Assets already held by trustees sit outside your estate for probate
Privacy	A proved will becomes a public record anyone can order	The trust deed is not published
Inheritance tax	Estate taxed at 40% above available nil-rate bands	20% entry charge above the nil-rate band, ten-year charges up to 6%, exit charges
Cost	One-off drafting fee	Set-up fee plus ongoing trustee, tax return and registration work
Control after you act	Full control until death	You give up ownership; trustees decide within the deed
Trust Registration Service	A will trust closed within 2 years of death is excluded	Most express trusts must register

What a will does and what a trust does

A will appoints executors, names guardians for children and says who gets what. It can also create trusts that start on death: a life interest trust lets a surviving spouse live in the house for life while the capital is preserved for children from an earlier relationship, and a discretionary will trust lets trustees choose between family members as needs change.

A lifetime trust is created by deed while you are alive: you (the settlor) transfer cash, shares or property to trustees, and the assets stop being yours. For families with assets or heirs in several countries, our guide to making an international will covers which law governs your will.

Probate and privacy

The clearest difference arrives on death. Assets in your sole name freeze until your executors obtain a grant of probate; assets in a lifetime trust stay under the trustees' control.

Privacy follows the same line. Once probate is granted the will becomes a public document: the government's online service lets you search probate records in England and Wales and order a copy, including the will, for £16. A trust deed is not published, one reason families with valuable businesses prefer to hold key assets in trust.

Cost, running costs and the Trust Registration Service

A will is a one-off cost. A lifetime trust costs more to set up and keeps costing money: trustees keep accounts, file trust tax returns where income or gains arise and handle periodic inheritance tax reporting.

Registration is not optional. HMRC's Trust Registration Service guidance requires most UK express trusts to register, generally within 90 days of being created or becoming liable to tax, and warns of a possible £5,000 penalty for failing to do so. A will trust that takes assets from the estate and is closed within 2 years of death is excluded; a long-running life interest in the family home is not.

Control, flexibility and protection

On control, the will wins: you can rewrite it until you lose capacity, and nothing leaves your hands while you are alive. A lifetime trust is the opposite trade. Once assets are settled you generally cannot take them back, and keeping a benefit for yourself, such as living rent-free in a house you have put in trust, usually undermines the tax purpose.

Protection is where trusts earn their keep, for the right problems.

• Vulnerable or young beneficiaries. Trustees can manage money for a child, a disabled relative or someone with debt problems instead of handing it over at 18. HMRC gives special treatment to trusts for a disabled person, a bereaved minor and "18 to 25" trusts.
• Divorce of a beneficiary. An inheritance paid outright can mix with matrimonial assets; holding it in a discretionary trust can help, though a family court can still consider what a spouse is likely to receive. See our comparison of prenups and postnups and our international divorce guide.

The care fees myth and deliberate deprivation

Many lifetime "property protection trusts" are sold as a shield against care fees. The statutory guidance to councils is blunt: its Annex E on deprivation of assets lists putting assets "in to a trust that cannot be revoked" as a common way of depriving yourself of capital. The council asks whether avoiding charges was a significant motivation in the timing and whether care could reasonably have been expected; if so, it can charge as if you still owned the asset. A gift made while fit and healthy is treated very differently from one made after a diagnosis.

Will vs trust tax: inheritance tax compared

On tax, the will vs trust comparison turns on timing. Everyone has a nil-rate band of £325,000, and a residence nil-rate band of £175,000 applies when a home passes to direct descendants, tapering away above £2 million. HMRC's thresholds policy paper confirms Budget 2025 fixed both bands up to and including 2030 to 2031, and that unused bands pass to a surviving spouse or civil partner, so a couple can leave up to £1 million tax free. See our report on the Budget 2025 tax measures.

A will leaves everything in your estate, taxed at 40% above the available bands, with the spouse exemption deferring tax to the second death. A will trust rarely changes that bill, but HMRC treats an interest in possession trust created by a will as outside the ten-yearly and exit charges.

Most lifetime trusts fall under the relevant property regime set out in HMRC's guidance on trusts and inheritance tax:

• Entry charge. Transfers above the nil-rate band, counting chargeable gifts in the previous 7 years, are taxed at 20% if the trustees pay.
• The 7-year rule. If the settlor dies within 7 years, the transfer is taxed at the full 40%, with a further 20% payable from the estate. Gifts into a bare trust escape the entry charge and fall out of account if the donor survives 7 years.
• Ten-year charge. Every tenth anniversary the trust pays a principal charge on its relevant property; HMRC's manual says the rate may be anything up to 6%.
• Exit charges. Capital leaving the trust between anniversaries is charged at up to 6%.

So a couple can each settle up to £325,000 every 7 years without an immediate charge, with future growth accruing outside their estates. Settling more triggers the 20% charge up front, which is why large lifetime trusts are often built around reliefs.

What changes in 2026 and 2027

Two reforms reshape the will vs trust tax question for wealthier families.

First, farms and businesses. HMRC's agricultural relief guidance confirms that for deaths on or after 6 April 2026 combined 100% agricultural and business relief is limited to £2.5 million, not the £1 million first announced, with 50% relief above that. The cap counts qualifying property in trusts and qualifying gifts made on or after 30 October 2024 within 7 years of death, and any unused allowance can pass to a surviving spouse or civil partner.

Second, pensions. The Budget 2026 overview of tax legislation of 28 October 2026 confirms that most unused pension funds and death benefits enter a person's estate from 6 April 2027, as legislated in Finance Act 2026. Wills that assumed the pension sat outside the estate need a fresh look; our report on inheritance tax on pensions from 2027 covers the mechanics.

Lasting powers of attorney and the wills reform

Neither a will nor most trusts help if you lose capacity while alive. Lasting powers of attorney for property and financial affairs and for health and welfare let people you choose act for you, the natural partner to either plan.

Wills law may change. The Law Commission's Modernising Wills Law report of 16 May 2025, with a draft Bill to replace the Wills Act 1837, recommends valid electronic wills, the Mental Capacity Act 2005 as the single test of testamentary capacity, a minimum age of 16 and an end to automatic revocation on marriage. None of this is law. On 30 October 2026 the House of Lords Justice and Home Affairs Committee, chaired by Lord Foster of Bath, wrote to courts minister Sarah Sackman asking why the government's full response was taking so long.

An international note

Trusts are a common-law institution, and many civil-law countries do not recognise them or apply forced heirship rules a will cannot override. For UK inheritance tax, residence now matters more than domicile: HMRC ties excluded property status for non-UK trust assets to whether the settlor was a long-term UK resident. Our comparison of residence vs domicile, our guide to leaving the inheritance tax net and our piece on setting up a family office go further.

Which suits you

The will vs trust decision usually resolves into a few cases.

Your situation	Usually suits
Estate under the available nil-rate bands, simple family	A will, plus lasting powers of attorney
Second marriage, children from an earlier relationship	A will with a life interest trust
Young, disabled or vulnerable beneficiaries	A will trust, or a lifetime trust if funding now
Surplus wealth you can afford to give away	A lifetime trust within the £325,000 band every 7 years
Farm or family company above £2.5 million	Specialist relief planning, often with trusts
Wanting to avoid care fees with a home you live in	Not a trust: deprivation rules are likely to apply

Beyond the first row, take advice from a family and private client adviser and, where reliefs or pensions are involved, a tax specialist in England; cross-border families can also read our guide to choosing a wealth manager.

Frequently asked questions

Is a will or a trust better in the UK?

Neither is better in the abstract. Everyone needs a will. A lifetime trust adds value only where you want to give assets away now while keeping control, protect a vulnerable beneficiary or keep holdings private, and it brings tax charges and running costs.

Does a trust avoid inheritance tax?

Not automatically. Most lifetime trusts pay 20% on transfers above the £325,000 nil-rate band, ten-year charges of up to 6% and exit charges. Gifts within the nil-rate band, made at least 7 years before death, can remove future growth from your estate.

Does a trust avoid probate?

Assets already held by lifetime trustees are outside your estate for probate, so they can be dealt with without waiting for a grant. Assets left by will, including those passing into a will trust, still go through probate.

Can I put my house in trust to avoid care home fees?

Usually not effectively. Council guidance lists transfers into an irrevocable trust as a common form of deprivation of assets; if avoiding care charges was a significant motivation, you can be assessed as if you still owned the house.

What is the 7 year rule for a trust?

If you die within 7 years of a chargeable transfer into a trust, the transfer is taxed at 40% instead of 20%, and your estate pays the extra 20%. Gifts into a bare trust fall out of account entirely once you survive 7 years.

Do I need to register a will trust with HMRC?

Not if it is wound up within 2 years of death. A will trust that continues beyond that, such as a life interest in a home, normally needs registering on the Trust Registration Service.

Can I make an electronic will in England and Wales?

Not yet. The Law Commission recommended valid electronic wills in May 2025, but the government has not legislated, so a will must still be in writing, signed and witnessed.

Sources

1. HMRC, Inheritance Tax: thresholds (policy paper, 26 November 2025): gov.uk
2. HMRC, Trusts and Inheritance Tax: gov.uk
3. HMRC, Inheritance Tax Manual IHTM42081, Ten year anniversary: introduction: gov.uk
4. HMRC, Agricultural Relief for Inheritance Tax (updated 6 April 2026): gov.uk
5. HM Treasury and HMRC, Budget 2026: overview of tax legislation and rates (28 October 2026): gov.uk
6. HMRC, Check if you need to register a trust (updated 13 July 2026): gov.uk
7. GOV.UK, Search probate records for documents and wills (England and Wales): gov.uk
8. Department of Health and Social Care, Care and support statutory guidance, Annex E: deprivation of assets: gov.uk
9. Law Commission, Wills project and Modernising Wills Law final report (16 May 2025): lawcom.gov.uk
10. The Law Society Gazette, Peers admonish MoJ over electronic wills delay (30 October 2026): lawgazette.co.uk

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against HMRC guidance, the Budget 2026 tax overview and the Law Commission's report. It is general information, not legal or tax advice; for advice on your own will, trust or inheritance tax position, consult a qualified adviser. Last reviewed 5 November 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.