Have you thought about protecting your children's inheritance? You may question why you may need to, but certain life events may mean that your children miss out on the inheritance you intend to pass to them.
A Life Interest Will Trust is a type of Trust which is becoming increasingly popular, as it can be used to shield a share of your home from long term care fees.
Typically, a property is held by couples as Joint Tenants which means that on the death of one of them the property passes automatically by rules of survivorship to the other. If the survivor subsequently enters into long term care, the property may have to be sold and the proceeds used to pay care home fees, thus depriving your children of their inheritance.
However, by seeking an expert Wills and Trusts solicitor you can take steps to ensure that the family home is held as Tenants in Common and by creating in your Will a Life Interest Trust, you can protect a share (usually 50%) of the family home as an inheritance for your children.
When both parties die or the surviving spouse enters into a care home, the share of the property held on Trust passes to the children.
The Life Interest Trust is also tax efficient as this type of Trust benefits from the spousal exemption from inheritance tax.
A Life Interest Trust has other uses as well. It is particularly popular on second marriages, as it can be used to provide security for your husband/wife whilst at the same time protecting the inheritance for your children of the first marriage.
If you would like to set up a Life Interest Trust or just discuss your position, please contact our Wills and Probate Team on 0113 320 5000 for expert advice.
