There can be a lot of mystique surrounding trusts but the basic information you need to know is quite straightforward and they are a powerful financial planning tool. 

For example, many people are aware that if you make a gift of, say £50,000, to your children or grandchildren, it is no longer included in your estate for inheritance tax purposes 7 years later.  However, you have immediately lost control of that money and cannot change your mind later on about the individuals who have received that gift.

Setting up a trust to control when and how your gift is distributed is reasonably straightforward.  A trust, by the way, is simply a piece of paper containing a form of words which have a meaning that has been agreed upon in law.  You and, say, your spouse, can be the trustees and maintain control over the money while the 7 year clock is ticking, if reduction of inheritance tax is your purpose.  As trustees you decide where the money should be invested.  The main restriction, of course, is that neither the money nor any income it produces can be used for your benefit.  This is no loss, however, when compared to giving the money away immediately.

The gift you have made does not go directly to your children or grandchildren and under the situation we have described they would wait for at least 7 years before receiving their share of it.  In many cases the people who are to receive your gift are minors anyway at the time the gift is made into the trust.

Once the 7 years is up you as the trustees can distribute the assets in the trust to your children and or grandchildren, or anyone else listed in the trust document, in whatever portions you then think fit.  This is like giving a gift with hindsight.  So if, for example, one of your children is by then quite well off, and another is having a hard time of it, you could direct more of the trust fund to the latter child if you want to.