Trusts in a client's affairs: when to bring in a specialist

A trust is simply an arrangement where one person holds assets for the benefit of another. In practice they show up in a client's affairs in many guises: a discretionary trust holding shares, a trust created by a will for young children, a life-interest trust giving a surviving spouse the use of an asset, or a bare trust holding money for a grandchild. You encounter them through the tax returns, the accounts, and the questions clients ask about protecting money for the next generation.

The difficulty is that trusts are frequently either not used when they should be, or set up informally and then run incorrectly. Both create problems, and both often surface first through the numbers you see. An accountant who recognises the pattern can prompt the right specialist involvement before a well-meant arrangement turns into a tax or compliance headache.

You are not there to recommend a trust — that is specialist territory — but you can recognise the situations where one is worth exploring:

• A client wanting to provide for a disabled or vulnerable family member
• Parents or grandparents wishing to set money aside for children without giving outright control
• A business owner planning succession who wants to hold shares for the next generation
• A client concerned about assets passing to a beneficiary going through divorce or financial difficulty
• A blended family where a client wants to provide for a current spouse but preserve assets for children from an earlier relationship

Each of these is a cue to introduce a vetted specialist, not to design a structure yourself.

Existing trusts bring their own risks, and here your professional eye is valuable. Trusts carry registration and reporting obligations — including registration on the Trust Registration Service — and their own tax treatment, which differs from an individual's. A trust that was set up years ago and then forgotten may be non-compliant without anyone realising, exposing the trustees to penalties.

If you spot a trust in a client's affairs that appears unregistered, unadministered, or filed incorrectly, that is a strong signal to bring in a specialist. You can flag the general concern — that the trust may have obligations that are not being met — while leaving the detailed remedy to someone qualified to give that advice. Noticing the gap is within your role; fixing the legal structure is not.

Trusts sit at a junction of law, tax and estate planning, and the temptation to advise informally is real because clients ask direct questions. Resist giving the answer. Whether a client should create a trust, which type, how it should be worded, and who the trustees should be are matters for a vetted, regulated specialist. Your part is to identify that the question deserves proper attention and to make the introduction.

This protects the client from half-formed advice and protects you from stepping into work outside your competence and authorisation. The clean division — you handle the accounting and tax compliance you are qualified for, the specialist handles the trust's creation and legal administration — is the safest and most professional footing for both of you.

When you make the referral, keep it grounded: the client's situation looks like one where a trust could be relevant, or an existing trust may not be meeting its obligations, and you can introduce them to vetted specialists who handle these properly. That is enough. The specialist takes it from there, and you continue with the compliance work that feeds into it.

Through a documented referral arrangement, with the client's consent recorded, the introduction is rewarded with a share of the resulting fee — typically a 60-70% member share — while you remain firmly the introducer. Trusts are one of the areas where clients are most likely to muddle through alone and get it wrong. Your ability to spot the moment, and your trusted route to a competent specialist, quietly prevents a great deal of avoidable trouble.