Several types of trust are available in the UK, and each provides different levels of control and flexibility.
A bare trust gives a beneficiary an absolute right to the trust’s assets once they reach the relevant age. A discretionary trust allows the trustees to decide which beneficiaries receive money, how much they receive and when payments should be made.
An interest in possession trust gives a beneficiary the right to receive income or occupy a property while preserving the underlying asset for somebody else. This can be useful when providing for a surviving spouse while protecting an inheritance for children.
Other arrangements include accumulation trusts, mixed trusts, trusts for vulnerable people and trusts created specifically through a will.
The legal and tax treatment differs between these arrangements, so the right trust should be selected according to its intended purpose.