Flexible Life Interest Trust (FLIT)
A Flexible Life Interest Trust allows you to put your assets into trust for the benefit of your children or other nominated beneficiaries. The Trust is activated after first death and provides the following benefits.
- The life tenant has a guaranteed right of residence in the property for the remainder of his or her life, or a clause can be put in where right of residence is removed upon re-marriage. If at any time the surviving spouse wants to sell the property, buy another one, the Trust enables them to do so. The Trust includes powers for the Trustees to loan the capital to the surviving spouse, this is done as an IOU and has to be repaid upon second death. The Trust involves severing the joint tenancy where required so that the owners become Tenants in Common.
- This enables Trustees to convert some or all of the it into another type of Trust. So if for example, Inheritance Tax Laws change and the trustees consider it financially advantageous for the Trust capital to sit in another type of Trust, they are able to convert it.
- A Flexible Life Interest Trust means that on the death of the first partner, his share of the house and assets do not go to the spouse or partner but directly into trust. The money placed in a Trust is treated for Inheritance Tax purposes as an outright gift to the surviving spouse. Therefore this does not use any of the deceased spouse’s IHT allowance, with the allowance preserved for later on 2nd death.
- If you need help with financial planning and have questions regarding Inheritance Tax. Findon Legal Consultants can arrange for a specialist to discuss this with you further.
- A Flexible life Interest Trust: To discuss whether this trust may affect any liability with regards a Local Authority assessment for care please contact Findon Legal Consultants on 0845 2723584 or contact us on the enquiries section of this Website.
- People often want their children to inherit the family home in the event of theit deaths, without sufficient protection this may not always be possible.
Where assets are jointly owned they automatically pass over to the surviving joint owner. This creates a potential problem if the survivor then goes on to remarry or cohabit, leaving the assets to the new wife or partner. The estate may then pass to children of that relationship with the deceased partners children disinherited. A Flexible Life interest Trust protects against these circumstances.
- Placing the assets into Trust means that the house cannot be assessed should a beneficiary be declared bankrupt.
Children from other marriages:
- Where assets belong to a couple who both have children from previous relationships. The Trust can secure and guarantee an appropriate distribution of assets, ensuring that each parent’s assets go to their children.
- Assets can be released to the beneficiaries upon second death and or upon re-marriage of the surviving partner. This guarantees that each child or beneficiary receives the inheritance planned.
Dependant Relative Claims:
- Dependant relative claims: The trust cannot be contested or challenged unlike a will.
How many Trustees are needed?
- At least two Trustees must appointed on creation of the Trust.
Contact Findon Legal Consultants for more information on these or any other trusts.
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