You Can't Have Your Cake and Eat It: The Trust Conversation I Have Every Week

By Alexandra Livesey, Solicitor and Partner

There's one conversation about trusts that comes up almost every week, and it tends to start the same way.

A client sits down because they want to protect an inheritance for their children or grandchildren. Perhaps they're worried about divorce, about financial difficulties, about a future relationship that might not work out, or simply about the fact that money built up over a lifetime can disappear surprisingly quickly once it changes hands. They've usually heard that trusts can help, and they're right. A trust, done well, can be one of the most effective tools in estate planning.

At some point during the conversation, a variation of the same request normally emerges: "I want my daughter/son to be able to do whatever they like with the money. But I also want it protected."

That's the moment it's worth pausing, because those two wishes: complete freedom on one hand, real protection on the other,  don't sit as comfortably together as they might seem to. More often than not, they pull in opposite directions entirely.

What people are often describing, without quite realising it, is a beneficiary with full ownership, full control and full freedom  - someone who can spend the money, move it, invest it, give it away, leave it under their own Will. And that's a perfectly reasonable thing to want. But at that point, what's being described isn't really a trust anymore, at least not in any meaningful sense. Because a trust's protection doesn't exist despite a beneficiary lacking complete control. It exists because of that. That's not a technicality tucked away in the small print. It's the whole mechanism.

Most parents aren't trying to protect assets from their children. In fact, most of the families walking through the door trust their children completely and are immensely proud of them. The concern is almost never the son or daughter sitting there today. It's everything that might happen over the next twenty, thirty, forty years - the marriages that end, the businesses that fail, the health that changes, the new partners who arrive, the circumstances nobody could have predicted. The person inheriting at thirty-five may be living an entirely different life at fifty-five. That's not a judgement on anyone. It's simply what decades do to people.

Where trustees fit into all of this

One misunderstanding comes up more than most: the idea that trustees exist to rubber-stamp whatever a beneficiary asks for. They don't. Trustees carry real legal responsibilities  and they're expected to use judgement, make decisions, and safeguard what's been placed in their care.

If a beneficiary can demand whatever they want, whenever they want it, and the trustees never really push back, it's worth asking a fairly honest question: what, exactly, is the trust doing? Because when someone has that level of control over an asset in practice, sooner or later someone else - a divorcing spouse's solicitor, a creditor, a court -  is likely to ask whether the asset ever really belonged to the trust at all.

Divorce is a good example of how this plays out. Clients often want assets held in trust precisely because they want them protected if a beneficiary later divorces, which is entirely sensible. But picture a beneficiary who has spent years treating the trust fund as a personal account  - capital advanced whenever asked for, investment decisions effectively theirs, trustees who never say no. On paper, the trust still exists. In practice, it starts to resemble outright ownership with some extra paperwork attached. And that resemblance matters, because it's exactly the moment the protection people were counting on becomes hardest to rely on. The same pattern shows up with creditors, with financial difficulty, with family disputes. The principle holds: the closer a trust operates to outright ownership, the harder it becomes to argue it deserves the protections a trust is meant to provide.

That doesn't mean beneficiaries cannot enjoy the assets

None of this means trusts have to be rigid. In fact, that's another misconception worth clearing up. People sometimes picture funds locked away for decades, beneficiaries left waiting on the sidelines with no real benefit. That's rarely how a well-drafted trust is designed to work. Trustees can help with a house purchase, with education, with support through a difficult period, and can respond as circumstances change over a lifetime. A beneficiary can gain enormous benefit from a trust without ever owning the underlying capital outright,  and that distinction, benefiting from wealth rather than owning it outright, is where a great many families find exactly the balance they were looking for.

Where does that leave families considering a trust?

Strip away the legal language, and estate planning tends to come down to one trade-off: how much protection matters, set against how much control someone is willing to give up to achieve it.

There's no answer that's right for everyone. Some families decide that freedom matters most, and in those cases an outright gift may genuinely be the better choice. Others place more weight on protecting what's been built for the generations that follow. Most people land somewhere between the two. What rarely works is expecting maximum protection and maximum control at the same time, as though there were no tension between them, because there is, and there always has been. Pretending otherwise tends only to store up disappointment for later, often at exactly the moment it's least welcome.

So the starting point, before deciding whether a trust is the right fit, is an honest look at what's actually being sought. If the priority is complete ownership and complete decision-making in someone else's hands, an outright inheritance may well be the right path. If the priority is preserving what's been built and putting safeguards around it for the future, a trust may serve that family better. Neither is inherently the right or wrong answer -  they are simply different tools, built for different outcomes. A trust can be a genuinely powerful piece of planning. But it isn't magic, and it can't usually hand someone complete ownership and complete protection in the same breath.

In summary, what I find myself repeating week after week is that trusts can be incredibly effective where the objective is to provide a degree of long-term protection, but that protection rarely exists in isolation from the structure itself. The more a trust is expected to operate as though the beneficiary owns the assets outright and can do whatever they wish with them, the more difficult it can become to preserve the very protections that led people to consider a trust in the first place.

Anyone weighing up whether a trust is the right fit for their family's estate planning is welcome to get in touch with the Private Client team at Solomons Solicitors. We're happy to talk through the practical advantages, the limitations, and what each option would actually mean in practice.

About the Author

Alexandra Livesey is a Solicitor, Partner and Head of Private Client at Solomons Solicitors. She advises individuals and families on Wills, trusts, inheritance tax planning, Lasting Powers of Attorney and estate administration, and is particularly passionate about helping families protect hard-earned assets while ensuring wealth passes on in a way that reflects their wishes, values and family circumstances.

To discuss your estate planning needs, contact Solomons Solicitors on 01202 802807