Why you should consider a Life Interest Trust Will
If you live with your partner but have children from a previous relationship, would you want your them to be able to continue living in your home if you passed away and still ensure your children receive your share of the property? If so, you may want to consider a Life Interest Trust Will.
What is a Life Interest Trust Will?
A Life Interest Trust Will is beneficial for blended families where one or both partners want to ensure their own children receive their share of any properties they own but also want the surviving partner to be able to live in the property for the rest of their lifetime.
A Life Interest Trust allows properties belonging to a person to be placed within a Will for the benefit of a named individual for their lifetime, known as the ‘Life Tenant’. The Life Tenant will be entitled to remain in the property or receive income from any investment properties. Once the life interest comes to an end, usually when the Life Tenant dies, the capital is distributed to the ultimate beneficiaries.
A Life Interest Trust ensures your partner is looked after for the rest of their life and that the capital value of the fund is preserved for your absolute beneficiaries. This protects your estate from the influences of another spouse, for example, if the surviving partner were to re-marry.
If you do not create a Life Interest Trust and you give you share absolutely to your partner on the proviso that they will leave the whole property to all the children on their death, there is a possibility they may change their Will after your death to remove your children. There is nothing to prevent them from changing their Will, and therefore there is a risk that your children may not inherit, despite your wishes. A Life Interest Trust protects your share in your property and ensures it will go to your children as your partner will only retain a Life Interest and will not legally own your share.
Who should consider a Life Interest Trust?
A Life Interest Trust is not exclusive to those with blended families, and it can be used in all sorts of situations.
With regards to long term community care, if you have a Life Interest Trust on your main property and it is jointly owned, then you and your co-owner will own 50% each. This is because you will own the property as Tenants in Common. If you need to go into care in the future, the Government may only look at your share of the house when considering your ability to pay. Therefore, a Life Interest Trust can help to minimise the impact of care home fees.
How can we help?
If you feel a Life Interest Trust may be something you want to consider then contact us to discuss your circumstances. We will go through all the issues that should be considered when setting up a Life Interest Trust Will and discuss whether it is the best form of Will for you.