Trusts and family control: the trade-off to weigh before you sign

A trust is often considered when a family is trying to solve a tax issue. On paper, yes, the trust can have a lot of benefits for the family. However, putting assets in a trust also means losing control over those assets. This aspect is often overlooked and only surfaces when the family (maybe one or two generations down the line) wants to do something with its own wealth and realises it can no longer decide alone. What was presented as an efficiency turns out to have moved something worth more than tax.

What a trust changes

When a family settles assets into a trust, legal ownership passes to a trustee, who holds and administers those assets for the beneficiaries under terms written at the outset. The family stops owning the assets directly. It becomes a beneficiary of a structure run by someone else, within rules it agreed to at the start and may not easily change afterwards.

A capable trustee acts in the family's interest and takes the responsibility seriously. Who holds that role, and how well they do it, matters enormously, and we cover it separately in our guide to the trustee in a family office. The structural fact sits underneath all of that. The family has handed legal title to its assets away, and it will not get it back on a whim.

Trade-off: efficiency for control

Every trust decision comes down to one exchange. You gain in tax efficiency and you give up a measure of control. Both are real, and in the right circumstances the exchange is worth making.

A trust thought through in advance, with a clear purpose and a trustee the family trusts, can protect assets across generations even through difficult successions. The difficulty begins when the tax saving is the only figure in view and the control surrendered is treated as a detail. Tax is measurable and immediate, it shows up in a projection an adviser can put on one page. Control is felt years later, often by the next generations, when they reach for a decision they can't effectively take.

What we see in single family offices, time and again, is that this second cost was never priced at the outset. The saving was genuine and the surrendered control acceptable for the principal in light of the current family's reality. The conversation about what the family was giving up in the mid/long run has most probably not happened with the same care as the conversation about what it would save, and even more so without the heirs who would live with that decision in the room.

Reversibility simply carries a value families tend to price at zero, right up until the moment they need it.

Structures grow more complex over time

When wealth is held across several countries it requires different structures. Around 88% of the family offices surveyed by UBS in 2026 now hold bankable assets in two or more jurisdictions (UBS Report¹), and each jurisdiction brings its own vehicles and its own reason to add one more layer of structure.

1UBS, Global Family Office Report 2026.

Each layer answers a real question at the moment it goes in and is usually easy to add. Put enough of them together, over enough years, and the family ends up with a structure no single person fully understands, assembled by successive advisers who have since moved on. We have written before about why there is no ideal family office structure to copy from a template. The same rules apply here. A structure that fits one family's assets and intentions will naturally trap another's.

We worked with a family that realised this at the worst possible moment, during a succession (I can assure you, it never happens at a good moment). Three trusts and two holding companies had been added across a decade, each for a sound reason at the time, each recommended by a different adviser. When the next generation decided to simplify and take direct ownership of, what should be, their assets, they found that unwinding the arrangement would trigger tax charges in two countries and take the better part of two years. The structure built by their mother to protect the family had become a wall around it. None of the individual decisions had been wrong but the absence of anyone weighing the whole, and asking how it would all come apart, was the problem.

The dismantling test

There is a simple test for any structure a family is weighing. Ask how quickly, and at what cost, it could be taken apart.

A structure that can be unwound in months, cleanly, leaves the family free to change its mind as life changes. One that would take years and a fortune to dismantle has become permanent, whatever the paperwork suggests. An irrevocable trust settled to resolve a succession will hold the family to those terms a decade later, whatever has changed in between. The Murdoch family's fight over an irrevocable trust is a reminder that no one, not even the most successful people, should overlook the control, revocability and dismantling aspects.

Trusts do not generally fail. Reversibility simply carries a value families tend to price at zero, right up until the moment they need it.

Owner vs. custodian

There is also a human side to this the tax analysis misses. A family whose wealth sits inside structures it does not control starts to feel like a guest in its own house. Members receive rather than decide. Over a generation, that changes how a family sees itself and what it believes it is allowed to do with what the previous generation(s) built.

We put a plain question to families in this position: are you the owner of your wealth, or its custodian? The honest answer is often less comfortable than expected. Family members are people building lives, not units of capital to be placed wherever a structure runs most efficiently. Where they live, how they raise their children, what they want the wealth to do in the world, all of this should shape the structure. A structure that starts shaping those choices instead has the relationship the wrong way round.

Decision process

1. Decide the purpose first (I cannot stress this enough). A trust exists to serve a goal: protecting a vulnerable heir, holding an asset undivided through a succession, meeting an obligation that crosses borders. Name the goal, then ask whether a trust is the simplest way to meet it, or whether a plainer arrangement would do the same work with less given up.

2. Weigh the control surrendered as carefully as the tax saved and the impact this will have not only for you but also for your heirs, maybe one, two, even three generations down the line.

3. Keep the structure as simple as the goal allows, and where two versions achieve the same end, favour the one that can be undone.

4. Take specialist legal and tax advice, because the mechanics are complex and this article is no substitute for it. Then keep the decision itself with the family. The adviser knows the instrument but only you and your family know what you are willing to give up to use it.

5. Finally, consult the family members (spouse, heirs, cousins...) who could be impacted by this decision. By challenging it, you will be better able to assess whether it is the right one to take.

The families who stay in control across generations tend to be the ones who kept things simple enough to adapt. A trust held in service of a purpose the family chose earns its place. But if it starts to dictate the family's choices, it has stopped doing the job it was built for.