RODNEY KING & PARTNERS

SOLICITORS BRISTOL
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Solicitors Bristol
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Life Interest Trusts in Wills

An increasingly common area of Estate planning is where someone has remarried but has children from a first marriage. A life interest trust in a Will can offer a solution to the issue of protecting the children's inheritance while still providing for the current spouse.

Life interest trusts have a number of applications and we would be happy to discuss these with you and how they may be used in planning your estate.

With a standard Will, if you leave everything to your new partner your assets would become theirs when you die. These assets would in turn form part of their estate and, upon their death, would pass to their own beneficiaries, who may be their own children.

The potential effect is that any children from your first marriage would not benefit under your estate. This risk can be avoided by preparing a Will which includes a life interest trust.

The family home is a good example of where this can be used. You may wish to leave the property to your children eventually, but still enable your current partner to live in the house after you have died.

You can stipulate that your partner occupies the house contact usuntil their death, or alternatively subsequent remarriage, and impose conditions to ensure that the property is kept in a good state of repair.

When their life interest ceases, ownership of the property will pass to your children or other beneficiaries. In this way you can look after the interests of both your partner and your children.

Benefits of a Life Interest Trust

  • You control the ultimate destination of your assets whilst still enabling your partner to benefit from those assets.
  • Care home fee mitigation - assets held within a life interest trust are ring-fenced from your spouse’s assets and cannot be taken into account when assessing your partner for care home fees, thus protecting the assets.
  • Protection against bankruptcy - assets held in the trust cannot be taken in the event of your spouse's bankruptcy as they have no right over the capital.

What assets can form part of a Life Interest Trust?

  • Property.
  • Cash – your spouse can benefit from the income generated by cash assets whilst the capital itself is protected by the trust.

Contact us for more information or to arrange a consultation.