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Life Interest Trust

View profile for Lisa Carter
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A Life Interest Trust should be considered if, for example:

  • you want to protect your assets against care fees;
  • you have children from a previous relationship and want to provide for your new spouse but also want to ensure your children inherit your assets;
  • you want to protect your assets in the event that your spouse re-marries after your death.

What is a Life Interest Trust?

A Life Interest Trust provides your chosen beneficiary, also known as the life tenant, the right to benefit from the assets in the trust during their lifetime or possibly until they remarry.  This would give them the right to reside in your property and/or the right to receive an income from any investments that are held in the trust.  On the death of the life tenant, the trust comes to an end and the funds are transferred to your chosen beneficiaries, such as your children.  They are known as the remaindermen.

The funds held within the trust are protected against any care fee assessment as they do not belong to the life tenant, often the surviving spouse but if funds are needed by them you can give the Trustees of the trust the right to pass funds to them or use them for their benefit.   They are also protected if the life tenant remarries and subsequently divorces or if they become bankrupt.

Tax Implications

These vary depending on who you choose as your life tenant and remaindermen and so it is important to seek advice before putting something in place. 

Is this the right option for you?

It is important to obtain legal and tax advice when putting your Will in place as this ensures that you have a Will that has been drafted for your personal circumstances. 

The Private Client team at Gepp and Sons would be very happy to assist you in making the right choice and if you have any questions or wish to book an appointment to discuss your Will, please ring 01245 228127.

 

Article researched and produced by Hollie Allcorn – Gepp and Sons Private Client Team