The most successful modern trusts, so this article argues, are those that adapt not just to property held but to the families for whom it is held.

The following article that looks at the durability of trusts and how they can be adjusted and protected for future eventualities, comes from Jennifer Ridgeway and Charlotte Fraser (both pictured below) of law firm Farrer & Co. These are complex issues and we are grateful to be able to share these detailed insights. The usual editorial disclaimers apply to views of guest writers. To comment, please email tom.burroughes@wealthbriefing.com and amanda.cheesely@clearviewpublishing.com

Jennifer Ridgeway


Charlotte Fraser

The trust is one of English law’s most enduring and adaptable creations. At its simplest, it separates legal ownership, held by trustees, from beneficial ownership, enjoyed by beneficiaries. Its historical roots lie in arrangements for managing land during an owner’s absence, but over the centuries it has developed into a sophisticated mechanism for holding and managing wealth across generations.

The property entrusted to trustees has evolved considerably. Early trusts held land, grain, wine or livestock. As financial markets developed, trust portfolios came to include bank accounts, stocks, shares, bonds and other financial instruments. Recently, following rapid technological advancements, a digital asset class has emerged, including for example crypto-tokens, non-fungible tokens, stablecoins, security tokens, and so on.  Trust law continues to strive to accommodate each new form of wealth.

Just as the trust has evolved to accommodate evolving asset classes, it needs to be able to evolve with the family it serves. During its lifetime, the assets, the family and the purpose for which the wealth is held may all change. Effective planning therefore requires not only a sound legal structure, but an architecture capable of functioning after the authority and influence of the wealth founder has fallen away.

Building trusts: balancing control and flexibility
Wealth creators have long used trusts in lifetime and in their wills to preserve wealth, provide for a surviving spouse or partner and regulate how later generations benefit. The appropriate structure will depend upon the assets and family concerned. The more difficult question is often not who should benefit, but where responsibility for future decisions should sit.

A trust may continue for decades. Choices made at the outset about trustee appointment, investment powers and the involvement of family members or protectors can therefore have consequences well beyond the founder’s lifetime.

The power to appoint and remove trustees may provide valuable continuity, but it requires an effective succession mechanism. A protector can act as a constitutional safeguard, perhaps overseeing changes in trusteeship or fundamental alterations to the structure. Broad approval rights over distributions, investments and reorganisations, however, may blur the division of responsibility and inhibit trustees from developing independent relationships with beneficiaries.

Investment provisions require similar care, particularly where family wealth is concentrated in a business or estate. A founder who created wealth through entrepreneurial risk may have a different risk profile from the trustees, who will be responsible for a widening beneficial class and will need to consider preservation, liquidity and diversification. The trust should accommodate that tension rather than assume one investment philosophy will remain appropriate indefinitely.

The objective is not maximum flexibility. It is to preserve the purposes that matter while ensuring that trustees retain sufficient room to respond responsibly to circumstances the founder cannot foresee.

Keeping pace with the family
Adaptability also depends upon the identity and expectations of the beneficiaries. Traditional expressions such as “children”, “issue” and “descendants” may not include everyone who the family assumes they cover. Stepchildren and children born through surrogacy or assisted reproduction may sit uneasily with older definitions. Cultural norms will change over time, as noted in In the Representation of Zedra Trust Company (Suisse) SA re C and D Trusts (2023) in which it was recognised that trust provisions which once upon a time may have been “consistent with the Settlor's cultural heritage” may no longer be appropriate given the “culture, values and lifestyle of the current beneficiaries.” 

New instruments should address these possibilities expressly. Existing trusts should be reviewed as the family develops, not only to establish who falls within the beneficial class, but to consider whether the trust still serves its original purpose.

A founder may expect descendants to continue holding wealth collectively, retaining a family business and using common trustees and advisors. Later generations may want greater autonomy and have different investment, philanthropic or personal priorities. Where appropriate, trust terms should permit separate funds to be established for different family branches. A planned reorganisation is usually more effective than one undertaken after disagreement has become entrenched.

Flexibility should therefore extend beyond the drafting of the beneficial class. It should allow the trust’s administration and asset-holding arrangements to develop as relationships and family branches evolve.

Governance beyond the founder
Good governance connects the original plan with the circumstances in which trustees must later implement it. During the founder’s lifetime, trustees will have a full understanding of the founder's wishes. But there is an important distinction between understanding the founder’s wishes and simply following instructions.

That distinction becomes obscured if decisions are effectively settled before trustee meetings, or trustee records describe the founder’s preferences without demonstrating independent consideration. Many later disputes concern whether trustees genuinely exercised their discretion.

Letters of wishes can provide valuable guidance but should be reviewed periodically. Excessive prescription may constrain future decision-making, while years of informal communications may leave trustees with several competing versions of what the founder intended. A separate, plain-English governance document can help family members understand the trust’s purpose, the roles of trustees and any protector, and how information and significant decisions will be managed.

The founder’s death or declining involvement is often the real test. A patriarch or matriarch may previously have acted as decision-maker, mediator, family historian and source of authority. Trustees should then consider whether preserving the existing arrangements remains the best means of preserving the founder’s broader objectives.

Trusts do not invariably prevent disagreement. Sometimes they defer it until the person who held the family together is no longer present. Good governance reduces that risk through clear roles, careful succession planning, meaningful engagement with the next generation and a shared understanding that preserving a family’s wealth may sometimes require the structure itself to change.

The trust has endured because it is adaptable. The most successful modern trusts apply that adaptability not only to the property they hold, but also to the families for whom it is held.