Legal News | 29.05.25

Hidden legacies: the role of secret trusts in estate planning

The recent case of Lorenz v Caruana[1] reminds us of a peculiar aspect of English estate planning law, which allows individuals to create ‘secret trusts’ in their Wills.

What is a secret trust?

A secret trust arises where an individual leaves a gift in their Will to a named recipient. However, what they in fact intend is for that recipient to act as ‘secret trustee’ and pass on the gift to another person who is not named on the face of the Will (a ‘secret beneficiary’).

A secret trust can be ‘fully secret’ where the trust is not apparent on the face of the Will (and instead looks like an outright gift to the secret trustee). Alternatively, a secret trust may be ‘half secret’ where the Will shows that the secret trustee is receiving the gift in the Will as trustee but for who or what purpose remains private between the Will-maker and the recipient. In both cases, there must be a clear intention to create the secret trust, communication to the secret trustee that the gift is to be held for the secret beneficiary and acceptance of that role by the secret trustee.

The risks

Secret trusts are unusual and not without risk. If the secret trust fails for any reason (e.g. the death of the secret trustee), the gift to the secret beneficiary may never come to fruition. Disputes can also arise if a secret trustee denies the existence of the trust and claims the gift for themselves. Given the nature of such gifts, there may well be limited, if any, evidence available and it may be difficult for the ultimate beneficiary to argue that such a trust exists.

The recent case of Lorenz v Caruana, which has been allowed to proceed on the basis that proving a secret trust in that case has a realistic prospect of success, shows us that this is not impossible but may be a very difficult task.

Where confidentiality is paramount, those making Wills may be better advised to pursue alternative options such as creating discretionary trusts with private letters of wishes to the trustees, which (unlike a Will) will not become a public document (see our newsletter of April 2025 discussing discretionary Will trusts in more detail).

How can we help?

Our solicitors would be happy to advise you in relation to your Will and the most appropriate structure to ensure your wishes are given effect.  For further information, please contact the Private Client team at Wansbroughs LLP.

[1] Lorenz v Caruana 2025 EWCA Civ 606