Trusts, Tax, and the Bigger Question of Legacy
Recent reporting has highlighted a clear trend: more families are setting up trusts than ever before. But, this moment is about more than tax.
Rising inheritance tax receipts, frozen allowances, and upcoming changes to how pensions are treated upon death are pushing estate planning much higher up the agenda for households who may never have expected it to be relevant to them.
However, while much of the public conversation focuses on the tax mechanics, this shift reflects something far deeper. For many people, this is not just a technical or financial issue, it is prompting a more fundamental question:
What do I want my wealth to achieve — now, and in the future?
The combined effect is clear: more estates are exposed to inheritance tax, more complexity is being introduced, and more families are being forced to engage with planning decisions earlier and more deliberately.
Frozen allowances, expanding estates, and new pressure points
The main inheritance tax thresholds have now been fixed for many years. Over time, inflation and asset growth have meant that more estates are exceeding these limits, even where families would not consider themselves “wealthy”.
Alongside this, upcoming reforms will bring unused pension funds into the scope of inheritance tax from April 2027. Pensions have played a central role in passing wealth efficiently between generations. Their inclusion within the estate will materially change the planning landscape for many families and business owners.
The combined effect is clear: more estates are exposed to inheritance tax, more complexity is being introduced, and more families are being forced to engage with planning decisions earlier and more deliberately.
Why trusts are increasingly part of the conversation
Against this backdrop, it is unsurprising that trusts are being used more widely.
Trusts can allow individuals and families to:
• place assets into longer-term structures rather than relying solely on wills
• control how and when beneficiaries may benefit
• protect vulnerable family members
• and, where appropriate, reduce exposure to inheritance tax over time
By looking beyond the mechanics of tax, families can use trusts to ensure that assets are managed and invested in ways that reflect their beliefs not only during their lifetime, but long after.
However, trusts are not simply a technical solution. They offer an opportunity to connect estate planning with the values that shape a family’s financial decisions. By looking beyond the mechanics of tax, families can use trusts to ensure that assets are managed and invested in ways that reflect their beliefs not only during their lifetime, but long after.
From tax planning to legacy planning
For many families, the real opportunity in this changing environment is not just to revisit figures and allowances, but to reflect more deeply on what they want their wealth to stand for. Estate planning is, at its heart, an expression of values.
It is about:
• the responsibilities you feel towards future generations
• the causes or communities you care about
• the kind of world you want your wealth to support
• and the behaviours you want to encourage long after you are gone
Trusts can be a powerful way to formalise those intentions. They can be structured not only to distribute capital, but to do so in a way that reflects purpose: supporting education, protecting family members, enabling philanthropy, or ensuring assets are managed patiently and responsibly across generations.
This is where financial planning and ethical investment thinking naturally converge.
Aligning structures with values
As families place more assets into trust, an important question follows: how should those assets be invested?
The growth of trusts creates an opportunity to align long-term planning with long-term impact. Trusts are, by design, forward-looking vehicles. They are intended to operate across years and often decades. That makes them particularly well-suited to investment approaches that consider not only financial return, but environmental sustainability, social outcomes, and the quality of corporate behaviour.
For individuals who care about the legacy they leave, it is increasingly difficult to separate estate planning from questions of:
• climate and environmental responsibility
• social contribution and fairness
• and the role capital plays in shaping future society
In this context, ethical and values-based investing is not an “add-on”. It becomes a core part of what effective legacy planning actually means.
A changing tax environment, and a wider opportunity
The current inheritance tax environment is undeniably challenging. Frozen thresholds and expanding rules mean that more families will face difficult conversations and unfamiliar decisions.
As more families are drawn into inheritance and trust planning, the most meaningful outcomes are likely to come not simply from minimising tax, but from building arrangements that reflect purpose, integrity, and long-term thinking.
But it also creates a valuable moment. A moment to move beyond reactive planning. A moment to ensure that structures, investments, and intentions are aligned. A moment to think not only about what is passed on, but what it continues to do.
At Castlefield, we often work with people who see wealth as a responsibility as well as an opportunity. People who want clarity, but also conscience. People who want their financial decisions to reflect both personal goals and wider values.
As more families are drawn into inheritance and trust planning, the most meaningful outcomes are likely to come not simply from minimising tax, but from building arrangements that reflect purpose, integrity, and long-term thinking.
If recent changes have prompted you to review your estate planning, it may be an opportunity not only to restructure assets, but to shape a legacy that genuinely reflects what matters to you.
Written by Helen Tandy
Information is accurate as of 18.02.2026. Opinions constitute the adviser's judgement as of this date and are subject to change without warning. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.