Why Having a Will Isn't Enough: The Role of Wills and Trusts in Protecting Your Family's Future
By Ryan Guthrie, Financial Planner, Lionbridge Wealth
Most people understand they should have a will.
Yet surprisingly, millions of UK adults either don't have one at all or have a will that was written many years ago and no longer reflects their circumstances.
When clients first meet with us, one of the most common assumptions we hear is:
"I've got a will, so everything is sorted."
Unfortunately, that is not always the case.
A will is one of the most important legal documents you will ever sign, but in many situations a will on its own may not provide the level of protection, flexibility or tax efficiency that families need.
This is where trusts can play a valuable role.
The real question isn't whether you have a will.
The question is whether your estate plan is designed to protect the people you care about most.
What Happens If You Die Without a Will?
Many people are surprised to discover that if they die without a valid will, their assets do not automatically pass to the people they would choose.
Instead, your estate is distributed according to the rules of intestacy.
These legal rules determine:
Who inherits your assets.
How much each beneficiary receives.
Who administers your estate.
How minor children are treated.
In some situations, the outcome can be completely different from what the deceased would have wanted.
For example:
Unmarried partners have no automatic right to inherit under intestacy rules.
Stepchildren may receive nothing.
Certain family members may inherit who were never intended to benefit.
Additional legal costs and delays can arise.
A properly drafted will ensures your wishes are documented clearly and legally.
What Does a Will Actually Do?
A will does far more than simply state who receives your money.
A professionally drafted will allows you to:
Decide Who Inherits Your Assets
Rather than allowing legislation to make decisions on your behalf, you determine exactly who receives what.
Appoint Executors
Executors are responsible for administering your estate, dealing with financial institutions, paying liabilities and distributing assets.
Choosing the right executors can make a significant difference to how smoothly an estate is administered.
Appoint Guardians For Children
For parents of young children, this can be one of the most important aspects of a will.
Without clear instructions, decisions regarding guardianship may ultimately be left to the courts.
Create Trusts
Many people are unaware that trusts can be established within a will, creating additional protection and flexibility for future generations.
Potentially Improve Tax Efficiency
Whilst a will alone does not automatically reduce inheritance tax, careful drafting can form part of a wider estate planning strategy.
The Problem With Leaving Assets Outright
At first glance, leaving everything directly to your beneficiaries may seem the simplest option.
However, simple is not always best.
Consider the following scenarios.
What happens if a beneficiary:
Is going through a divorce?
Suffers financial difficulties?
Faces creditor claims?
Loses mental capacity?
Has addiction issues?
Is vulnerable to financial exploitation?
Dies shortly after inheriting?
Simply lacks financial experience?
An outright inheritance provides no protection whatsoever.
Once assets are received, they belong entirely to the beneficiary.
This is where trusts can become extremely valuable.
What Is a Trust?
A trust is a legal arrangement that allows assets to be managed by trustees for the benefit of chosen beneficiaries.
Rather than assets passing directly into someone's name, they are held within a structure designed to provide control, flexibility and protection.
Trusts have been used by families for centuries.
Whilst they are often associated with the wealthy, many trusts are established by ordinary families seeking to protect loved ones and preserve family wealth.
Why More Families Are Using Trusts
The modern family is often more complex than ever before.
Second marriages, unmarried partners, blended families, business ownership, increasing property values and inheritance tax concerns have all contributed to a growing need for more sophisticated estate planning.
Trusts can help address these challenges.
The Protective Property Trust
One of the most common trusts used within wills is a Protective Property Trust.
This can be particularly useful for married couples and civil partners who own their home together.
Consider this example.
John and Sarah own a home worth £450,000.
John dies first and leaves everything outright to Sarah.
Several years later:
Sarah remarries.
Sarah requires long-term care.
Sarah changes her will.
Sarah faces financial difficulties.
Without any protective planning, assets intended for John's children could ultimately be diverted elsewhere.
A Protective Property Trust can ringfence part of the family home, helping ensure that the deceased's share ultimately passes to the intended beneficiaries whilst still allowing the surviving spouse to continue living in the property.
This type of planning is often particularly attractive for:
Second marriages.
Blended families.
Families concerned about future care fees.
Families wishing to protect children's inheritance.
Discretionary Trusts
Discretionary trusts are among the most flexible trust structures available.
Rather than specifying fixed entitlements, trustees have discretion regarding:
Who benefits.
When they benefit.
How much they receive.
This flexibility can be extremely valuable.
Circumstances rarely remain unchanged over decades.
A discretionary trust allows trustees to respond to changing family situations whilst maintaining protection over underlying assets.
Vulnerable Beneficiary Trusts
Some beneficiaries require additional protection.
This may include:
Beneficiaries with disabilities.
Beneficiaries with special educational needs.
Beneficiaries receiving means-tested benefits.
Beneficiaries with reduced financial capacity.
In these situations, a specialised trust structure may help preserve eligibility for benefits whilst ensuring funds remain available for future needs.
For families with vulnerable loved ones, this can be one of the most important areas of planning.
Business Owners Have Additional Considerations
Business owners often focus heavily on building wealth but spend less time considering what happens if they die unexpectedly.
Questions that should be addressed include:
Who inherits the business?
Can surviving family members continue operating it?
Will business assets qualify for Business Relief?
Is there sufficient liquidity to meet tax liabilities?
Are shareholder agreements aligned with wills?
Without proper planning, significant complications can arise for surviving family members and business partners.
Wills, Trusts and Inheritance Tax
One of the biggest planning opportunities often involves inheritance tax.
Inheritance tax is currently charged at 40% on assets exceeding available allowances.
For many families, rising property values and growing investment portfolios mean inheritance tax is becoming increasingly relevant.
Trusts can sometimes form part of a wider inheritance tax strategy by helping:
Preserve family wealth.
Control distributions.
Facilitate intergenerational planning.
Support gifting strategies.
Protect inherited assets.
However, trusts are not primarily tax-saving vehicles.
Their greatest value often lies in protection, control and flexibility.
The Most Common Mistake We See
The greatest mistake is not having the wrong trust.
It is doing nothing at all.
Many families have:
No will.
An outdated will.
New grandchildren not included.
Former executors who have died.
Changes in marital status.
Significant increases in asset values.
No consideration of trust planning.
A will written ten or fifteen years ago may no longer be appropriate today.
Estate planning should evolve as life changes.
Estate Planning Isn't About Death
This may sound surprising, but effective estate planning is not really about death.
It is about protecting the people you care about whilst you are alive and giving them clarity when you are gone.
The best plans reduce uncertainty.
They reduce family conflict.
They protect vulnerable beneficiaries.
They preserve wealth.
They provide peace of mind.
And they help ensure that assets pass in accordance with your wishes rather than leaving important decisions to chance.
Our View at Lionbridge Wealth
A will is one of the most important foundations of any financial plan.
However, for many families, a will alone may not provide sufficient protection.
Trusts can offer significant additional benefits where families wish to:
Protect children and grandchildren.
Safeguard assets from future risks.
Preserve family wealth.
Provide flexibility.
Support vulnerable beneficiaries.
Manage inheritance tax concerns.
Protect against unintended outcomes following remarriage or changing family circumstances.
Every family's circumstances are different, which is why estate planning should never be approached with a "one-size-fits-all" mindset.
A Final Thought
Most people spend decades building their wealth.
Far fewer spend time considering how that wealth will ultimately be protected.
A well-structured will forms the foundation.
The right trust structure can provide the walls, roof and security around it.
The question isn't whether you need a will.
The question is whether your current arrangements truly protect the people and the legacy you have worked so hard to build.
If you would like to review your existing will, discuss trust options or explore inheritance tax planning opportunities, we would be delighted to help.
Because successful financial planning is not just about growing wealth.
It's about protecting it for the people who matter most.
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