Life Interest Trusts – what are they and why they are useful?
Not many people have heard of a Life Interest Trust, let alone know what one is or why they are useful tools to secure assets and funds for future generations, whilst ensuring they can still be enjoyed or used to care for others during their lifetime.
Life Interest Trusts can be set up in a Will, allowing for a loved one to have the benefit, or enjoyment, of the estate you leave behind, but without them actually having legal ownership over it. The most common Life Interest Trust is between couples, where when on the death of the first partner, their personal possessions and house can be used by the remaining person, or Life Tenant, until their death. But as they never take legal possession of it, when they also pass, everything in the trust is left according to the Will of the first partner. This allows, for example, the surviving partner to stay in the family home, to take an income from any rental property or investments, or even the use of a timeshare. This is called a beneficial ownership, and the trustees will hold the legal ownership, meaning that they can sell or distribute the trust once the Life Tenant has passed or no longer has use of the trust property.
To speak to us about Life Interest Trusts, please contact Natasha at email@example.com.