Description
A life interest trust is an arrangement whereby your Will provides for one beneficiary during their lifetime but, once that person passes away, your assets are transferred over to someone of your choosing, for example your children rather than in accordance with your lifetime beneficiary’s wishes.
A life interest trust can be created in respect of your entire estate, or in relation to only one (or several) specific assets. For example, if you have children from an earlier relationship and a property that you purchased before meeting your current partner, you might be keen to ensure that your children ultimately benefit from your home whilst being happy for your partner to receive the rest of your estate.
As the name suggests, a life interest trust typically remains in place for the remaining life of your initial beneficiary. You can, however, create a life interest trust for a set period, such as five years, or until a certain event occurs. If your children and your partner are a similar age, you might not want your children to have to wait a long time before receiving their inheritance, or risk them predeceasing your partner and missing out altogether. In such a case, a set period could be sufficient to ensure that your partner does not feel rushed out of their home without your children’s inheritance become tied up for too long.
