A Life Interest Trust entitles a beneficiary (known as a "Life Tenant") to receive income only during their life, preserving the capital for other intended beneficiaries after the death of the Life Tenant. This is also known as an Interest In Possession Trust.
You can use a Life Interest Trust in your Will so that:-
- Your spouse receives the income from your estate
- There is no Inheritance Tax to pay when you die before your spouse
- The capital passes to your beneficiaries after your spouse's death
- The Life Interest can be flexible so that your Trustees can pass capital to your spouse or other beneficiaries as they think appropriate
A Life Interest Trust can also be used:-
- In second marriages for the benefit of children from an earlier relationship
- To preserve CGT relief on a property that you live in (Principal Private Residence Relief)
- To pass capital assets to the Life Tenant (or other specified beneficiary) to provide for future changes in circumstances
- A Life Interest in a Will is also known as an Immediate Post Death Interest (IPDI)
Please contact us to discuss how our Trusts Team can help you in setting up a Life Interest Trust.
