A Life Interest Trust is a type of trust that lets you leave your money or property to someone for their lifetime (‘a life interest’) but ultimately to others when that person (the ‘life tenant’) dies.
Typically you might leave a life interest to your partner. They then have the automatic right to the income generated by your assets during their lifetime, but no automatic right to the capital.
If you leave a property or your share of a property in this way, your partner would be entitled to live in the property for life, but your share would then pass to your ultimate beneficiary when he or she dies. This could, for example, be a child from a former marriage.
Life Interest Trusts can provide an elegant solution to other situations, which we explain later on in this article.
If you have been asked to be, or considering making someone an ‘executor’, this refers to the role of representing someone after they have passed away.
As we get older, it is more and more important to take every opportunity to enjoy ourselves.
A Lasting Power of Attorney (LPA) is the way to ensure that the people you trust will be able to take important decisions on your behalf if you become mentally or physically incapable of doing so for yourself. While LPAs are most often used to deal with the affairs of the elderly, if they are prepared much earlier in life they will give the same protection in the event of incapacity as a result of illness or accident.
When you die your estate must be dealt with. Making a Will ensures that any specific intentions you have for the division or disposal of your property, money and possessions after your death can be efficiently carried out.
There is a common misconception that if you die without making a Will, ‘it doesn’t matter because my spouse will get it anyway’.
Unfortunately this is not always the case. Many people also mistakenly believe that a long term partner will benefit even if there is not a Will. This is not the case. If you do not have a Will and you are not married, then your partner will not receive anything under the intestacy rules, whether it is a long term partner or not.