A life interest trust lets someone benefit from a trust’s assets (for example by drawing income or living in a property) for the rest of their life. The lifetime beneficiary doesn’t own the assets and after their death, the assets are distributed by the settlor’s executors according to the terms of the trust and/or the settlor’s will.
Why create a life interest trust?
A common reason is to make sure your partner/spouse and your children both benefit from your estate after your death. For example, by placing your house and investments in a life interest trust for your spouse, they can benefit from the investment income and can stay in the house after your death. Then, when your spouse dies, everything passes to your children.
Another example is where you want to leave a sum of money to a child, but allow your surviving spouse or partner to enjoy the income from the capital sum for as long as they live.
Life interest trusts are a simple way to make sure children and other relatives from previous relationships will benefit from your estate whilst protecting your new spouse or partner’s interests at the same time.
Contact Colin today to book a free, no obligation appointment to discuss your trust requirements.