Setting up a trust doesn’t mean you distrust your children or your next generations. A lump sum left to them is already a trust — just a badly designed one: a single payout, no governance, no oversight, triggered by your death. The only real question is whether the trust you leave is written on purpose or by default.
A friend pushed back on me hard once. He said setting up a trust for your kids is an insult — it tells them you don’t trust them to handle what you leave.
I understood the feeling. I just think it has the logic backwards.
Because here’s what I said back to him: you already have a trust. Everyone does. If your plan is to leave your children a lump sum, you’ve designed a trust — a very specific one. One distribution event. The whole amount at once. No conditions. No oversight. No one checking whether the moment is right or the person is ready. And the trigger that sets it off is the worst possible day for anyone to be making good decisions: the day you die.
Nobody would design that on purpose. It’s just the default, and defaults feel like “no decision” when they’re actually the biggest decision you’ll make.
The argument is…”Nigel, you dont trust your kids – you need to trust them.”
…let’s cover more of that in this article.
What a trust actually is
Strip away the jargon and a trust is simple: it’s a set of written rules for how money moves to the people you love, enforced by someone other than the people receiving it.
That’s it.
Rules, plus an enforcer who isn’t a beneficiary.
The lump-sum “trust” has rules too — they’re just thin:
- Rule one: lump sum everything upfront
- Rule two: now.
- Rule three: no one’s watching and whatever goes.
When you say it plainly, the version that “trusts the kids” is the one that gives them the least protection and the least help.
I trust structure over any single person — including myself
Here’s the part people miss.
A trust isn’t built because I distrust my children. It’s built because I distrust any single human being to be the sole point of failure for a family’s future — and that includes me.
I could change. I could get sick, get talked into something, get a few years older and a few degrees softer and make a call I’d have refused at my sharpest. A good structure protects against my own future decisions as much as anyone’s. It’s not a cage for my kids. It’s a guardrail for everyone, me included.
I’ve also seen, up close, what happens when an older person’s money has no structure around it — when it depends entirely on one trusted person staying wise, staying well, and staying honest. That’s not a plan. That’s a hope with a bank account attached.
The two rules I care most about
Drip, not dump. Income on a schedule, not principal handed over in a lump. The capital stays intact and working; what flows is what it produces. A lump sum is a one-time event you can lose in a bad year. A structure that pays out income is something that keeps paying your grandchildren’s grandchildren — if it’s built to.
Independent oversight. No single trusted leader — not a favorite child (no such thing for me!), not a family friend, not a lone trustee — can override the thing on their own. I set this up deliberately after watching a very public failure of exactly this kind, where one unchecked person at the top of a structure could move money that wasn’t theirs to move. One signature should never be able to undo what a whole family depends on.
Money, values, and memory — three parts, not one
The legal trust only governs the money. It’s one of three things I’m actually trying to pass on, and on its own it’s the weakest.
- The deed governs the money — the rules, the drip, the oversight.
- The constitution governs the values — a non-legal family document about who we are and what we stand for, which the money is supposed to serve.
- The relationship governs the memory — the shared time and conversations that make the first two mean anything. Without it, the other two are just paperwork.
The deed can reward good behaviour. It can’t create it. That part happens at the dinner table, over years, long before anyone reads a legal document. The trust rewards the character; it was never going to manufacture it.
So the question isn’t whether to have a trust
You already have one. The lump sum is a trust. The default is a trust. The question is only whether you wrote it on purpose.
Designing it deliberately isn’t a statement that you distrust your children. It’s the most trustworthy thing you can do for them: handing over not just the money, but the structure and the reasoning that lets the money survive contact with real life — theirs, and yours.
This is one piece of a bigger picture. If you’re thinking about how wealth actually survives being handed down, start with how to build generational wealth when you weren’t born into it — the trust is one part of that larger build.