What is a testamentary trust?
A testamentary trust is a trust created by a will which may take effect after death. Instead of giving assets outright to a beneficiary, the will can direct trustees to hold or apply assets under specified terms. The correct structure depends on the jurisdiction, the intended beneficiaries and the property involved. Merely ticking a “trust” option or naming a trustee is not enough to establish suitable operative terms.
Common types of trust instructions
Trusts for children
Parents may want to identify guardians and trustees, decide how funds could be applied for a child’s care or education, and consider the age at which the child should receive capital. A guardian and a trustee perform different functions; they need not be the same person. The law can restrict or affect the proposed terms.
Life-interest trusts
A life-interest arrangement may allow a surviving partner to occupy a home or receive income during their lifetime, with the remaining assets passing to other beneficiaries afterwards. The actual rights, maintenance responsibilities, powers to move house and tax treatment must be addressed in properly settled clauses.
Discretionary and vulnerable-beneficiary trusts
Discretionary trusts allow trustees to select how and when to benefit people within a defined class, subject to the trust terms and applicable law. Trusts involving a disabled or vulnerable beneficiary can require particular tax and benefits advice; it would be unsafe to assume that any generic discretionary trust achieves special treatment.
Property and blended-family arrangements
Property-protection planning requires checking ownership and survivorship first. A will cannot necessarily dispose of a share that passes automatically to a co-owner outside the estate. Where there are second marriages or children from earlier relationships, consider the effect of outright gifts versus interests and trust arrangements.
Inheritance tax: what the software can and cannot model
Inheritance Tax (IHT) depends on the value of the estate, reliefs, exemptions, lifetime transfers, beneficiary relationships and the applicable law at the relevant date. For 2026/27, HMRC publishes a standard nil-rate band of £325,000 and a maximum residence nil-rate band of £175,000, subject to eligibility and tapering. Unused allowances of a deceased spouse or civil partner may sometimes be transferable. These figures do not mean every estate receives the combined amount.
Fenton Marsh Make a Will offers illustrative IHT scenarios. It does not complete a full professional tax computation for every estate, calculate all relevant-property trust charges or determine every cross-border consequence. A lower modelled figure is not evidence that a proposed trust is tax-efficient or lawful.
Why local law matters
England and Wales, Scotland and Northern Ireland have distinct wills and succession rules. Scotland also provides legal-rights claims against moveable estate for specified family members. Clause wording approved for one system must not be copied into another without independent assessment.
Reliable starting points
HMRC — IHT thresholds and rates · GOV.UK — Making a will · mygov.scot — Wills in Scotland