Can a trust protect my assets if I go into care?

“I have a grown-up son and a granddaughter, and I want to make sure my assets are protected if I go into care. A friend mentioned setting up a trust, but I don’t know anything about them. How do trusts work? Are they useful for people like me?”

Moira, Portishead

Thanks for your question, Moira. Trusts are a complicated area, so I'll break down the basics before addressing your query about protecting assets from care costs.

A trust is simply a legal arrangement where one or more people (known as trustees) manage assets on behalf of others (the beneficiaries). We often think of trusts in terms of money, but assets could include property, shares, or land.

Trusts can give you more control over how your assets are managed and passed on. However, considering your question, it’s important to understand that they don’t automatically protect those assets from financial assessments or legal claims. Many people consider a trust because they want to plan for how their money or property should be handled, or to make sure their assets are used for a specific purpose or family member.

These are some of the most commonly used types of trust in the UK in 2026:

Bare Trust:

The assets in the trust go directly to the beneficiary when they are 18 years old (in England and Wales) or 16 years old (in Scotland).

Interest in Possession Trust:

The beneficiary has a legal right to the income generated by the trust assets, but not necessarily the capital (unless the trust deed allows it).

Discretionary Trust:

The trustees decide when and how beneficiaries receive the assets. For instance, they may decide whether to pay income, capital or both, depending on the trust deed.

Trusts for Vulnerable People:

Designed to support disabled or dependent people, these trusts can qualify for special tax rules that reduce certain tax liabilities - but only where the beneficiary meets specific legal criteria. You can learn more about trusts for vulnerable people here.

If you’re thinking of setting up a trust, or want to explore whether it's the right option for your circumstances, you should always consult a solicitor - this will help you avoid any legal or tax issues. They can help you decide which assets to include in the trust, choose trustees and beneficiaries, and define the terms of the trust in a trust deed.

Remember that setting up a trust won't necessarily protect your assets from care costs. Councils may treat trust assets as “notional capital” if they believe the trust was created to reduce care costs. Transferring assets into a trust to avoid care costs may also be seen as "deliberate deprivation of assets", which risks the council refusing to fund care. You can read government guidance about this here.

Trusts can also have consequences related to Inheritance Tax – especially discretionary trusts. So at the risk of repeating myself: make sure you talk to a solicitor or seek independent financial advice about this decision.

Good luck with making your arrangements, and let me know if you have any questions in the future!

The information in this article is for educational purposes only and should not be taken as legal or financial advice. Details are accurate at the time of publishing, and no liability is accepted for any inaccuracies or future changes. Always seek independent advice before making financial, legal or medical decisions.