How much does it cost to set up a trust?

Legal fees for drafting a trust deed are typically required when setting up a trust.Costs vary significantly, depending on individual circumstances. As a guide:The cost for setting up a trust in the UK typically ranges from £1,000 to £3,000 plus VAT.Complex cases involving a vast collection of assets or foreign assets can cost between £5,000 and £10,000 to set up a trust.In some circumstances, trusts may also incur inheritance tax charges when they are set up, as well as potential periodic or exit charges in the future. In addition, the income generated within a trust may be taxed differently depending on who benefits and how the trust is managed.

What are the common mistakes when setting up a trust?

Consulting an estate planning attorney and a financial advisor is advisable due to the complexities of trust arrangements. Not seeking professional advice when setting up a trust can result in costly mistakes and mismanagement of assets.As estate planning experts, we often come across these common errors when a client has chosen not to seek legal guidance:Not being clear about the goals of the trust can lead to mismanagement and disputes among beneficiaries.Failing to document decisions made by trustees can lead to challenges from beneficiaries regarding the management of the trust.Choosing the wrong trustees can significantly impact the management and distribution of trust assets.

Do you pay tax on a Trust fund?

Trusts can be a useful way to organise your financial affairs and can be structured in a tax-efficient way to minimise liabilities for beneficiaries.However, trusts in the UK are subject to certain tax liabilities, but the amount and type of tax depend on the structure of the trust and how the assets are managed.Capital Gains Tax: Gains from the sale of assets within the trust may be subject to capital gains tax. Trustees can often manage these assets to reduce liabilities in a tax-efficient manner.Inheritance Tax: Transfers into a trust may be considered for inheritance tax purposes. Importantly, as of 2026, a new £1 million combined cap applies to 100% relief for lifetime transfers into a trust. This means that careful planning is essential to ensure you remain within the threshold.

Setting Up a Trust

Protect Your Assets with a Professional Trust Structure

At Jones Whyte, we specialise in Estate Planning and understand the importance of protecting your wealth for future generations. Setting up a trust is a powerful way to manage and preserve your assets, ensure your wishes are carried out, and provide peace of mind for you and your loved ones.

What is a Discretionary Trust?

A trust is a legal arrangement where one person (the settlor) transfers assets held to another party (the trustee) to manage for the benefit of designated beneficiaries. Trusts are highly flexible and can be tailored to achieve a wide range of goals, from tax planning to protecting family members or providing and managing assets for vulnerable beneficiaries.

Once established, trusts often require formal compliance through a trust registration service, ensuring the trust is legally recognised and compliant with current regulations. Structuring a trust correctly is a complex process, which is why obtaining advice from a legal professional is essential.

Types of Trusts We Advise On

We advise on a wide range of discretionary trusts designed to protect assets, manage wealth, and support effective estate planning under Scottish, English and Welsh law.

Testamentary Trust Plans

A testamentary trust is created through a Will and allows you to control how assets are managed and distributed after death, providing flexibility and protection for your beneficiaries.

Family Protection Trusts

Family protection trusts help safeguard your wealth, ensuring family assets are preserved and passed on in line with your wishes while offering protection against future uncertainty.

Personal Injury Trusts

Personal injury trusts allow compensation awards to be held separately from personal finances, helping to protect benefits while ensuring funds remain accessible for care and support.

Vulnerable Persons Trust

Vulnerable persons trusts are designed to provide long-term financial support for individuals who may need additional protection, while ensuring funds are managed responsibly.

Our Process for Setting Up a Trust

If you are asking “how to set up a trust” or searching for ways to “set up a trust fund”, our team can guide you through the process with clarity and confidence. We provide a step-by-step service to ensure your trust is correctly established:

1. Initial Consultation

We begin by providing professional advice tailored to your unique situation during a free consultation. During this consultation, we assess your assets, family circumstances, and long-term objectives to determine the most suitable trust strategy.

2. Trust Design

Our expert solicitors will recommend the right type of trust for your needs, ensuring it is structured to protect your wealth, support beneficiaries, and optimise tax implications including inheritance tax and capital gains tax.

3. Drafting the Trust Deed

We prepare a valid legal document, known as the trust deed, that clearly sets out the rules, terms, and conditions of your trust. This ensures your instructions are unambiguous and enforceable.

4. Asset Transfer and Registration

We provide professional guidance on transferring your assets into the trust safely and efficiently, helping you manage trust assets and ensuring all transfers comply with relevant legal requirements.

Benefits of Trust Planning

Asset Protection

Trusts can provide benefits such as asset protection from creditors and efficient tax planning. By transferring assets into a trust, they are separated from personal ownership, which can prevent them from being targeted in lawsuits or other claims. This is particularly important for business owners, professionals, or anyone with significant personal assets who wants to safeguard their family’s financial security.

Control Over Distribution

One of the main advantages of a trust is the control it provides over how your assets are distributed. Unlike a Will, which distributes assets outright, a trust allows you to specify conditions, timing, and proportions for each beneficiary. This ensures your assets are used exactly as you intend, giving you peace of mind that your family is supported responsibly.

Inheritance Tax Planning

Trusts are an extremely effective way of managing tax, including inheritance tax and capital gains tax. They can also help you plan for potential income tax implications, as income generated within a trust may be taxed differently depending on the type of trust and distribution strategy.

Future Support for Dependants

Trusts provide structured financial support for children, elderly parents, or vulnerable relatives. You can fund education, healthcare, and long-term care while ensuring funds are managed professionally. By establishing a trust, you can safeguard a child’s financial future and provide ongoing support for family members who need it most.

Contact Jones Whyte today

For Expert Advice on Setting Up a Trust

Do not hesitate to reach out to our dedicated Estate Planning team, who are on hand to help. We also provide guidance on all Private Client matters.

0141 674 4366

info@joneswhyte.co.uk

Meet Our Trust Experts

Our expert solicitors in Trust Management can help you structure your estate in the best way and make you aware of how to protect your wealth for the future, provide for your loved ones and minimise tax.

Find a solicitor

Lorna Mirmelli

Senior Solicitor

Roisin Eleanor Gunn

Senior Associate

Ross Anderson

Partner

Reviews

Importance of Ongoing Trust Management

Ongoing management is essential to ensure the trust continues to meet your objectives, complies with changing laws, and remains a robust tool for safeguarding assets.

Even once a trust is established, trustees have ongoing responsibilities, including ongoing administration, managing investments, and monitoring distributions to beneficiaries. An annual review is recommended and ensures that the trust continues to operate according to your wishes and that all assets, both those held under the trust and other assets connected to your estate, are properly managed.

We offer structured review services designed to keep your trust on track:

Initial Review for New Clients: We assess your newly established trust to ensure all assets are properly transferred, legal titles are correct, and the trust is optimised for your estate planning goals.
Annual Review for Existing Clients: For ongoing clients, we provide a comprehensive annual review to assess asset performance, update documentation where necessary, and ensure continued compliance with current regulations.

Frequently Asked Questions

Legal fees for drafting a trust deed are typically required when setting up a trust.

Costs vary significantly, depending on individual circumstances. As a guide:

The cost for setting up a trust in the UK typically ranges from £1,000 to £3,000 plus VAT.
Complex cases involving a vast collection of assets or foreign assets can cost between £5,000 and £10,000 to set up a trust.

In some circumstances, trusts may also incur inheritance tax charges when they are set up, as well as potential periodic or exit charges in the future. In addition, the income generated within a trust may be taxed differently depending on who benefits and how the trust is managed.

Insights

Seeking legal advice and understanding your needs can feel overwhelming. Our insights offer clarity and guidance, showing how we can support you every step of the way.

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