Lifetime (Family Protection) Trust
These are set up during the lifetime of the occupant and are seperate to the Will. Under the Trust, the homeowner is also a beneficiary in this way they have similar benefits to the other trusts mentioned, as well as several unique advantages.
- Once the Trust is created the occupant can continue to live in the home for the rest of their life or lives, or until the point where continued residence is no longer required or appropriate.
- The Trustees cannot evict the life tenants. If later on in life the surviving spouse wants to sell the property, buy another one, thereby releasing some equity, they can do so. The proceeds of the sale will be invested and former owner will receive the interest or income earned on the invested capital.
- Gifting your house to someone else whilst still alive can mean you lose all control and rights over the property.
- Once set up, the Lifetime Trust means that the property is not formally part of the estate on death and is therefore not subject to the Probate process saving time, money and reducing administration at a difficult time.
- The property can be sold or transferred to the stipulated beneficiaries immediately after death.
Suitable for a single occupant:
- Unlike the other Trusts listed, a Lifetime Trust can be set up by a single unmarried occupant or widower. A Lifetime Trust is best suited to those who have no outstanding mortgage. If you have a mortgage in place and are interested in the above, agreement can potentially be gained from your lender but will depend on your specific circumstances.
Inheritance Tax Mitigation:
- If your assets (Property and additional savings) are valued at over £325,000 when you die, you will be liable to pay Inheritance Tax (IHT) at a rate of up to 40% on the remainder.
- Many couples now have estates in excess of £650,000 (considering property values, pensions, life insurance, savings, shares & investments) and, on the death of the second spouse IHT is charged on the combined estate to any benefactors. Additional Trusts can be added to a Lifetime Trust to help mitigate Inheritance Tax.
- 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 Lifetime (Family Protection) 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 their family home in the event of one or both of them passing away, however, without sufficient protection this may not always be possible.
- In circumstances where a Protective Property Trust is not in place and the home is jointly owned, the house would automatically pass over to the surviving partner. This creates a potential problem if the surviving partner then goes on to remarry leaving the estate to their future wife or husband. They may in turn leave the estate to their children of the new relationship as well as the deceased partners children, reducing the overall share. There is also a risk that they may leave it to the new family only, disinheriting the deceased partner’s beneficiaries.
Dependant Relative Claims:
- The Trust cannot be contested or challenged unlike a Will.
- A Trust can be put in place and allow access once a child is deemed reliable.
Contact Findon Legal Consultants for more information on these or any other trusts.
Let our experience be your guide