Hello,Â My name is Adrian Chambers and I’m a solicitor with Law for Life.Â Welcome to our web pages relating to Wills.Â Making a will is one of those things that we know we should do but rarely get around to actually sorting out. We can help you make the will you want, using our on-line documents, quickly, easily and at low cost.
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WHAT IS A WILL LIFE INTEREST TRUST AND SHOULD I MAKE ONE?
LIFE INTEREST TRUST The setting up of a Life Interest Trust in a will can be a useful way of protecting assets. The most common way would be to create a Will which includes a Life Interest Trust specifically in relation to your home or property. This usually enables you to give your half share of your home to your children whilst still allowing your spouse to reside in the property rent free for the rest of their life. Setting up a Life Interest Trust in wills can provide benefits either to preserve assets for your children or grandchildren, protect vulnerable dependants, save tax and to avoid paying residential care fees.
WHAT IS A LIFE INTEREST TRUST?Â If you and your spouse have severed your joint tenancy and created a tenancy in common in relation to your property (see further below) you can then make new wills creating a Life Interest Trust and leaving your half share of the property direct to your children (or grandchildren) but giving your spouse a right to occupy and continue to live in the property until your spouseâs death at which point your half share then passes to the children (or grandchildren).
BENEFITS OF A LIFE INTEREST TRUSTÂ The great thing about setting up a property Life Interest TrustÂ in a will in the above way is that you can pretty much guarantee that at least half the property is protected and ring fenced. This half share can protected for various reasons which could include, making provision for your children or grandchildren, or protecting a vulnerable person or the preventing a property from falling into the hands of the Local Authority if the survivor of you and your spouse should go into residential care.
JOINT TENANCYÂ Most properties are held by couples on what is called a âjoint tenancyâ. A joint tenancy is where a couple own a property equally but if one of them dies then the property automatically passes to the survivor. That is fine for most circumstances but if a couple want to make sure that a proportion of their property is left to their children or to consider some tax planning or avoiding paying some residential care fees then they need to consider severing the joint tenancy and creating a property Life Interest Trust.
TENANCY IN COMMONÂ That joint tenancy has to be severed so that a âtenancy in commonâ is created. This then means that on the first death instead of the property automatically transferring to the survivor (as it would on a joint tenancy), the property instead falls into the deceasedâs estate and is disposed of in accordance with the terms of the deceasedâs will.
SUMMARYÂ In essence you make sure you and your spouse own your property as tenants in common. You and your spouse then make wills with a Life Interest Trust includedÂ leaving your each half share not to each other but to your children. Whoever dies first their half share is held on trust for the survivor to have the right to continue to live in the property rent free and then on the survivors death the first deceasedâs half share passes to the children (as of course does the second deceasedâs half share as well.