Wealth structures

What is a
family trust?

A family trust holds assets for the benefit of your family under rules you set. Here is how the settlor, trustee and beneficiaries fit together, the common types, and how the wealth inside a trust is actually held.

Track trust-held assets free for 3 daysHow to create one

General information, not legal or tax advice · Swiss-built · Privacy-first

The three roles: settlor, trustee, beneficiary

A family trust is built on three parts. The settlor (or grantor) is the person who creates the trust and puts assets into it. The trustee holds legal title to those assets and is bound to manage them for others, not for personal gain. The beneficiaries are the family members who benefit — they may receive income, capital, or both. One person can wear more than one hat, but the separation between who controls an asset and who benefits from it is the whole point.

Why families set one up

Common reasons are passing wealth to the next generation without it all going through probate, providing for a child or relative who cannot manage money alone, keeping certain assets out of a single person's name, and setting clear rules about when and how money is released. A well-drafted trust can also reduce family disputes because the settlor's wishes are written down rather than left to memory.

Revocable vs irrevocable

A revocable (living) trust can be changed or unwound by the settlor while they are alive, which gives flexibility but usually offers little asset protection. An irrevocable trust generally cannot be altered once set up; in exchange the assets are more genuinely separated from the settlor, which can matter for protection and, in some places, tax. Which one fits depends entirely on your goal and your jurisdiction.

Common types you will hear about

Discretionary trusts give the trustee freedom to decide what each beneficiary gets. Fixed (or bare) trusts spell out exact entitlements. Testamentary trusts are created by a will and only start on death. Special-needs trusts and minors' trusts protect vulnerable beneficiaries. The labels and rules differ by country, so the same idea can carry several names.

How assets are actually held inside a trust

Putting assets into a trust is called funding it. Property is re-titled in the trustee's name on behalf of the trust, bank and brokerage accounts are opened in the trust's name, and shares or other holdings are transferred in. An empty trust does nothing — the document only matters once real assets sit inside it. From that point the trust, not the individual, is the owner of record.

The honest pros and cons

On the plus side: continuity across generations, possible probate avoidance, structured control, and in some cases protection or tax planning. On the minus side: setup and ongoing administration cost money, an irrevocable trust means giving up direct control, and trustees carry real legal duties. A trust is a serious commitment, not a quick wrapper.

How a family trust holds wealth

The idea behind every family trust is old and simple: separate the person who controls an asset from the people who benefit from it. The settlor places assets into the trust, the trustee becomes the legal owner of record, and the beneficiaries hold the right to benefit under the terms written in the trust deed. Because the trustee is bound by legal duties, the arrangement can outlast any single person and follow rules the settlor chose long ago.

A trust does nothing until it is funded. That step — re-titling property, opening accounts in the trust's name, transferring shares — is where many trusts stall. If you want the practical sequence, see our guide on how to create a trust. A trust is not the only way to hold family wealth, either: some families prefer a holding company, and plenty use both side by side.

Seeing the whole picture once a trust is funded

The day-to-day difficulty with a family trust is rarely the legal document. It is keeping sight of what the trust owns alongside everything the family holds personally or through a company. A trust might hold a property in one country, a brokerage account in another and some cash in a third, while the same household holds more wealth outside it. wlthy is built for exactly this spread: one ledger across all your entities, 9 asset classes, co-ownership and partner percentage splits per asset where wealth is shared, and a verified Wealth Statement PDF that can include trust-held value when you need to prove funds. 13 currencies, privacy-first, Swiss-built.

Trust structures vary widely by jurisdiction. This page is general information, not legal or tax advice. Always consult a qualified attorney or tax professional before setting up or relying on a trust.

Family trusts — frequently asked

What is a family trust in simple terms?

A family trust is a legal arrangement where one party (the trustee) holds and manages assets for the benefit of others (the beneficiaries), under rules set by the person who created it (the settlor). It is a way to hold family wealth separately from any single individual so it can be passed on, protected, or released under conditions you choose.

Who controls the money in a family trust?

The trustee controls the assets day to day and holds legal title, but is legally bound to act in the interests of the beneficiaries and follow the trust deed. The settlor sets the original rules. Beneficiaries do not control the assets directly; they have a right to benefit according to the terms.

What is the difference between a will and a family trust?

A will only takes effect on death and usually goes through probate, which is public and can be slow. A trust can operate while you are alive and continue afterward, often without probate, and can stay private. Many families use both — a will to cover anything outside the trust and a trust for the assets they want managed under specific rules.

Does a family trust protect assets from creditors?

It depends heavily on the type of trust and the jurisdiction. A revocable trust generally offers little protection because the settlor still controls the assets. A properly structured irrevocable trust can offer more, but timing matters: moving assets into a trust to dodge known creditors can be unwound by courts. This is exactly the kind of question to put to a qualified adviser.

Is a family trust only for wealthy families?

No. While large estates use trusts heavily, families of modest means use them too — for example to provide for a child with a disability, to manage an inheritance for young children, or to avoid probate on a home. The right structure scales to the goal, not just the size of the estate.

How is a family trust taxed?

Trust taxation varies enormously by country and by trust type. In some places income retained in the trust is taxed at the trust level; in others it is taxed in the hands of beneficiaries when distributed. Some structures are tax-neutral by design. Because the rules differ so much across the USA, UK, South Africa, Portugal, Germany and elsewhere, you should get advice for your specific jurisdiction.

How do I keep track of what the trust actually owns?

A trustee has a duty to know what the trust holds and what it is worth at any given moment, so the records have to stay current as values move and assets enter or leave. wlthy gives a trustee a single private ledger to value trust-held assets month to month, with a trail behind every revaluation and a verified Wealth Statement to share with beneficiaries or counsel when one is requested.

Wealth structures & tracking

How to create a trust

The practical steps to set one up.

What is a holding company

The other common wealth-holding structure.

Family office software

Run multiple households and entities in one place.

Track assets across structures

One ledger for trust, personal and company-held assets.

Proof of funds for a trust

A verified statement that includes trust-held assets.

One ledger for trust, personal and company-held assets.

Once your wealth is spread across a trust and the rest of the household, wlthy keeps it in a single view — with co-ownership splits and a verified Wealth Statement. Three days free before you commit.

Try wlthy free for 3 daysSee the wealth tracker

3-day free trial · Cancel anytime · Swiss-built · Encrypted at rest