Revocable & Irrevocable Trusts
What Is a Trust?
A trust is a legal arrangement where assets are held by Trustees for the benefit of others (the Beneficiaries). The person creating the trust is known as the Settlor.
Trusts are widely used in the UK to:
manage how wealth is passed between generations- often to avoid Probate
protect assets in certain circumstances
provide control over how beneficiaries receive funds
They are not “one-size-fits-all” and must be structured carefully to reflect your goals and comply with UK tax rules.
Types of Trusts in the UK
In UK estate planning, trusts are generally described by how they operate rather than simply as “revocable” or “irrevocable” (terms more commonly used in the US).
Bare (Absolute) Trusts
A bare trust (sometimes referred to as an absolute or fixed trust) is much more straightforward. The beneficiary has an immediate and absolute right to the assets held in the trust, even if those assets are managed by trustees until a certain age.
This structure provides certainty and simplicity, but it does not allow for flexibility if circumstances change and effectivley you are giving assets to someone with a check and balance built in.
Interest in Possession Trusts
With this type of trust, one beneficiary (often a spouse or partner) has the right to receive income from the trust during their lifetime, while the underlying assets are preserved for other beneficiaries (such as children) at a later date.
In some circumstances, the Settlor (you) can maintain a Life Interest in the trust asset which means they stay inside your estate for Inheritance Tax purposes but outside for Probate purposes - this is a very effective planning tool when set up correctly.
Discretionary Trusts
A discretionary trust gives trustees flexibility to decide how and when beneficiaries receive assets. Rather than fixed entitlements, trustees consider each beneficiary’s needs and circumstances at the time.
This type of trust is often used where family circumstances may change over time or beneficiaries are younger or financially inexperienced or there is a need to retain control and flexibility
Because decisions are made as circumstances evolve, discretionary trusts can be particularly useful for long-term family planning.
A Note on “Revocable” and “Irrevocable” Trusts
You may come across the terms revocable and irrevocable trusts. While these are widely used internationally, most trusts used for estate planning in the UK are, in practice, irrevocable once established.
This means that when assets are placed into a trust, the settlor typically gives up direct ownership. That loss of control is often what allows trusts to provide benefits such as asset protection or inheritance tax planning; although outcomes depend heavily on how and when the trust is set up, and of course a Settlor Interested Trust still allows some control of the assets but only with the trustees permission can assets be returned to the Settlor.
Tax and Legal Considerations
Trusts can play an important role in managing inheritance tax (IHT), but the rules in the UK are complex and must be approached carefully.
Depending on the type of trust:
there may be inheritance tax implications when assets are transferred into the trust
some trusts are subject to ongoing charges (including periodic and exit charges)
income and capital gains within the trust may be taxed differently
In some cases, assets placed into a trust may fall outside your estate for inheritance tax purposes, but this depends on factors such as timing, value, and the structure used.
Because of this, trusts should always be considered as part of a wider estate plan, not as a standalone solution.
How Trusts Are Used in Practice
When structured correctly, trusts can help families:
pass wealth to children or grandchildren in a controlled way
protect assets in situations such as divorce or financial difficulty (subject to legal limits)
provide for vulnerable or dependent beneficiaries
manage how and when beneficiaries receive funds
preserve family assets across generations
The key is ensuring the structure reflects your intentions and is set up at the right time.
Bringing It All Together
There is no single “best” type of trust. The right approach depends on your personal circumstances, your family, and your long-term objectives.
Some people prioritise flexibility. Others focus on certainty, protection, or tax efficiency. In many cases, a combination of structures, built around a strong Will, provides the most effective outcome.
Next Steps
If you’re considering using trusts, the first step is to make sure your Will is structured correctly.
From there, trusts can be introduced in a way that strengthens your overall estate plan, rather than complicating it.
You may also wish to explore our Lifetime Trust page for a more detailed look at how trusts are used in long-term planning.
Why Your Will Comes First
It’s a common misconception that trusts replace a Will. In reality, the opposite is true.
A Will:
Sets out your wishes clearly
Ensures your estate is distributed correctly
Trusts are then used to enhance that plan, adding control, protection, and flexibility where needed.
Without a properly drafted Will, even the most sophisticated trust planning can fall short.
Which Type of Will Do You Actually Need?
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