A Life Interest Trust arises when a beneficiary is left a lifetime interest in relation to assets contained in an estate. A Flexible Life Interest Trust can provide legal protection for the Life Tenant against any other beneficiaries of the trust, and vice versa.
What is a life interest trust in a will?
A life interest trust is a trust written into a will. This means that the trustees hold the assets in the trust on behalf of the beneficiaries. Life interest trust wills are special because there are two types of beneficiaries. Then there are the ‘remaindermen’, who get the property once the trust arrangement ends.
Is a flexible life interest trust a discretionary trust?
Back to BasicsEstate PlanningTrustsWillsBack to Basics – Flexible Life Interest Trust (FLIT) However, on the death of the life tenant, the trust automatically turns into a discretionary trust and is therefore treated as a relevant property trust.
How is a life interest trust created?
A testamentary life interest trust enables you to support a particular beneficiary after your death for a period of time chosen by you. A testamentary trust may be created using specified assets, a designated portion of your estate or the entire remaining balance of your estate.
What is the difference between a life interest trust and a discretionary trust?
A life interest trust is also referred to as an interest in possession trust. A life interest trust differs from a discretionary trust in that under a discretionary trust the trustee can decide whether to pay the income or gift the asset to one, some or all the beneficiaries, whilst they can even retain the income.
What is a flexible will?
Under type of Will, when one of a couple dies, their assets pass into a Trust rather than passing to their partner. To set up a flexible life interest Will, a solicitor will set out how you want the trustees to exercise their powers by preparing a letter of your wishes.
How does a flexible trust work?
A Flexible Trust is a legal arrangement which allows the owner of a life policy (the settlor) to give their policy to a trusted group of people (the trustees), who look after it. At some time in the future they pass it on to some people from a group that the settlor has decided (the beneficiaries).
