The Benefits of a Life Interest Will
Posted on 9th January 2021 at 09:12
If you are writing a will and want to provide a specific benefit for a loved one or other person or protect a property, you can stipulate the terms and conditions through what is called a life interest trust.
You might, for example, want to give a member of your family such as a child an income from your estate over a period of time. Another more traditional example might be if you have a property but want a person such as a spouse to be able to stay in it after your death while still protecting the asset.
A life interest trust generally lasts for a specific time or until the death of the beneficiary of the trust. Most arrangements such as this are created within a will and are often used to protect a specified property.
There are several reasons why you might want to consider putting a life interest trust in your will including:
If you are married but want to leave the property you own to your children (or your share of it), you can put stipulations in the will that your partner can continue to live in the property until such time as they remarry or decide to move on and sell. The property or proceeds from its sale then reverts to your chosen recipients, in this case either one or more of your children.
There can be variations in the terms of the will. For example, you may want your partner to be able to live in the property until such time as they want to leave but also agree for them to benefit from the sale and income of the home. Alternatively, you might have children from a previous marriage and want to provide for them.
The reason that life interest wills are popular nowadays is that they are more flexible than other trust arrangements. Putting one in place can have implications for paying inheritance tax if the value of your estate is above the threshold level. They can also be implemented to ensure that the value of the property is not used in any future care assessment.
The main reason for putting a life interest trust into your will is that it will makes sure your assets go to the people that you want it to. Setting up a trust can be a complex process, as you might expect, and it’s important that you use the services of a qualified solicitor who has experience of this area of probate.
At DSM Legal we have solicitors on hand who are experienced in all aspects of will creation and the setting up of trusts. It helps to sit down and discuss what your exact requirements are and what you are trying to achieve when it comes to life interest trusts. You will also want to discuss the tax implications both now and for the future in setting up a legal document such as this.
A life interest trust is not for everyone but if you think that you want to put one in place, then we’ll be able to talk you through the options and explain everything in plain English. Contact the team at DSM Legal if you want to find out more.
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