Lifetime Interest Trusts allow a particular dependant a ‘life interest’ which gives them the right to receive income from, or use the specified asset stated within the Trust for the rest of their lifetime. For example, this trust could be used if you wanted to make sure your children from your first marriage, received your assets but without depriving your new partner/spouse.
If you’ve decided who obtains your assets when you are gone, a Life Interest Trust is an excellent way to ensure that your wishes are carried out. Using this type of trust allows you to specify who owns the rights to your assets and protects everyone involved at the same time. This is a common problem, which Perfect Wills & Estate Planners can resolve, with just a little forward planning.
A Case Study from one of our clients
Mr and Mrs Cooper – Lifetime Interest Trusts
“Mr and Mrs Cooper decided to have wills including a life interest trust for the benefit of each other during the remainder of their lifetime. Their wills could leave their half share of the house to a trust and if they wished, any savings and investments they own on their death.
Under the terms of the trust, the survivor could remain living in the house rent free. They would also be free to move to a new house if they wished and the trust’s share of the proceeds of sale of the house could be invested in the new house.
If the trust held any money or investments then the survivor would be entitled to the income from those investments but would not be able to spend the capital. Upon the death of the surviving spouse, the trust would come to an end and the residue of monies/assets would be divided in accordance with the couple’s wishes. So, Mr Cooper could leave his ‘share’ of the estate ultimately to pass equally between his two daughters and Mrs Cooper could leave her ‘share’ of the estate ultimately to her son.”