Barriers to Trust Law for Low Net Worth Individuals

Language, Cost, and Access

Introduction

Trust law in the United Kingdom is often perceived as a domain reserved for high net worth individuals. However, the principles and instruments underpinning trust law have clear potential benefits for ‘low net worth individuals’ (LNWIs), including small business owners and families navigating financial instability. Despite this potential, barriers of language, cost, and accessibility systematically disenfranchise those who might otherwise benefit from trust structures.

This article examines those barriers and evaluates the potential advantages of trusts for LNWIs, alongside consideration of alternative structures, such as family investment companies (FICs), highlighting how legislative complexity, professional gatekeeping, and educational opacity combine to restrict access.

Language and Opacity in Trust Law

A primary obstacle for laypersons is the complexity of statutory language in trust law. Fitzpatrick (2018) notes that legislation, though intended to foster confidence, frequently becomes inaccessible through its technicality and intricate drafting. Similarly, Assy (2011) observes that legal language is necessarily precise for litigation, but this precision renders statutory trust provisions obscure to non-professionals. Kershaw (2024) and Herring highlight that opacity is not incidental but embedded in trust law, with clauses restricting beneficiaries’ access to information and perpetuating disadvantage.

The Trust Registration Service (TRS) has been criticised as “an administrative burden” and a “complex set of rules” (Foot Anstey 2024). Even the Law Society (2022) has warned that failure to interpret new obligations could lead to anti-money laundering (AML) non-compliance. If professionals require detailed guidance, laypersons’ exclusion from comprehension is unsurprising.

Low literacy compounds these barriers. OECD (2024) research reports that 18 percent of adults in England have low proficiency in literacy, and Ahmed et al. estimate the average UK adult reading age at nine. Ződi (2019) and Akpanke (2024) argue that, while complex drafting serves precision, it effectively disempowers non-experts.

Statutory frameworks further illustrate the complexity. The Trustee Act 2000, Trustee Act 1925, and Trusts of Land and Appointment of Trustees Act 1996 impose duties and powers that require careful cross-referencing for effective understanding. Compliance with the Money Laundering Regulations 2017, EU Directive 2015/849, and the Mental Capacity Act 2005 further compounds the legislative burden.

Cost and Awareness Barriers

Accessing trust law often requires engagement with professionals due to statutory prohibitions on unqualified persons preparing trust instruments for a fee under the Solicitors Act 1974 and Legal Services Act 2007. The case of Baxter v Doble (2023) illustrates the practical implications for those navigating these rules without legal training.

Professional associations such as STEP (2024) offer advanced trust education largely aimed at practitioners serving high net worth clients. The cost and target audience effectively exclude LNWIs, creating financial and educational discrimination.

This is reinforced by broader structural inequalities. Sommerlad et al. (2010) and AllAboutLaw (2023) highlight the entrenched class divide in legal education, with fewer opportunities for working-class individuals to access legal training or professional networks. Laypersons therefore face compounded barriers including cost, lack of awareness, and absence of accessible education.

Legal Fiction and Public Understanding

Trust law relies on legal fictions, including the separation of legal and beneficial ownership and the attribution of rights to trustees acting on behalf of others (Swadling 2016; USLegal 2025). These constructs are rarely explained outside professional or academic settings, creating widespread misunderstanding among LNWIs regarding property rights and taxation implications.

The failure to educate on such concepts undermines informed financial decision-making. Cases such as Abdel Rahman v Chase Bank (1991) and Pettitt v Pettitt (1970) demonstrate the practical consequences of misapprehensions regarding property and beneficial ownership.

Benefits of Trusts for LNWIs

Despite barriers, trust structures can offer substantial advantages to LNWIs. Trusts can protect family assets in the event of separation or divorce (Sanders 2013; Sneeringer 2019) and shield against creditors while allowing flexible beneficiary distributions. For working-class families, statistically more likely to experience family breakdown (McLanahan 2020), these protections are particularly valuable.

Trusts can also support tax planning and qualify for exemptions under the Trust Registration Service, including trusts for minors, disabled persons, and pension arrangements (ATT 2022; HMRC guidance). These exemptions reduce administrative burdens and professional costs, allowing LNWIs to achieve financial stability and security.

Companies versus Trusts

Comparison with corporate structures offers further insight. Companies, as separate legal entities, provide strong asset protection and improved access to capital, supporting business growth (Sitkoff 2003). Family Investment Companies offer succession and tax planning opportunities (Clark 2024; Deloitte 2023), yet their compliance obligations and administrative complexity make them less accessible to LNWIs.

Trusts, by contrast, deliver flexibility in estate planning and income distribution, coupled with lower operational costs and administrative requirements, making them more practical for small business owners and families with limited resources.

Conclusion

The evidence demonstrates that LNWIs face systematic barriers to engaging with and benefiting from trust law. Language complexity, high costs, and limited access to professional education act as gatekeeping mechanisms.

Nevertheless, trusts provide meaningful financial, protective, and tax planning advantages for working-class families and small business owners, particularly in the context of family breakdown and debt. Legal professionals and policymakers should work to make these instruments genuinely accessible through clearer statutory drafting, affordable education, and outreach to those who remain excluded from trust law’s benefits.

References

Akpanke AR (2024) Legal Writing Styles: Clarity vs Complexity

AllAboutLaw (2023) The Class Divide in Legal Education

Assy R (2011) Can the Law Speak Directly to its Subjects

Association of Taxation Technicians (2022) Trust Registration Service Updates

Clark D (2024) Family Investment Companies

Deloitte (2023) Family Investment Companies

Fitzpatrick P (2018) Creating Trust by Means of Legislation

Foot Anstey (2024) Trust Registration Service Consultation

Kershaw D (2024) Statutory Trusts and Trusty Statutes

Law Society (2022) TRS and AML Compliance

McLanahan S (2020) The Marriage Divide

OECD (2024) Survey of Adult Skills England

Sanders A (2013) Cohabitants in Private Law

Sitkoff RH (2003) Trust Law and Capital Market Efficiency

Sneeringer MA (2019) Trusts as Alternatives to Prenuptial Agreements

Sommerlad H et al (2010) Diversity in the Legal Profession

Swadling W (2016) Trusts and Ownership

USLegal (2025) Legal Fiction Definition

Ződi Z (2019) Limits of Plain Legal Language

Cases:
Baxter v Doble & Anor [2023] EWHC 486
Abdel Rahman v Chase Bank (C.I.) Trust Company Ltd [1991]
Pettitt v Pettitt [1970] AC 777

Legislation:
Trustee Act 1925
Trustee Act 2000
Trusts of Land and Appointment of Trustees Act 1996
Money Laundering Regulations 2017
Directive (EU) 2015/849
Solicitors Act 1974
Legal Services Act 2007
Mental Capacity Act 2005