What is a trust?

A trust is a way to set aside money or assets in your will to be looked after by a trustee – usually someone you trust – for the benefit of someone else. There are different types of trusts, but they’re often used to protect assets, support loved ones over time, or give you more control over how and when things are passed on.

What is a Flexible Life Interest Will Trust?

It’s a trust that looks after two sets of people: someone you want to support for the rest of their lifetime (called the life tenant, often a partner), and others you want to benefit after they’ve died
(often children).
While the life tenant is alive, the trust is treated as a life interest trust.
Then, on the death of the life tenant, the trust automatically turns into a discretionary trust.
The person you choose first, often a partner, can:

• Continue to live in your home for their lifetime
• Receive income from the trust for the rest of their life

It is called “flexible” because the life tenant will be entitled to receive the trust’s income during their lifetime and will be treated as the main beneficiary.

Your trustees will still have discretion in relation to the capital, which can be given to the life tenant or advanced to the beneficiaries, as may be needed over time.

This type of trust only comes into effect after you’ve died.

HOW LONG DOES IT LAST?

A Flexible Life Interest Will Trust can last up to 125 years, but usually ends when the first beneficiary dies and the assets are passed on.

What are the advantages of a Flexible Life Interest Will Trust?

• Supports two sets of people: Allows you to provide for one person (usually your partner) for the rest of their lifetime, and support others (like your children) in the future.
• Gives continuity in living situations: Allows your surviving partner to continue to live in your home, even if you’ve gifted your share to your children.
• Protects your assets: Keeps your home and money safe from risks like remarriage, debt, or future care home costs.
• Offers flexibility: Trustees can adapt how the trust works as your family’s needs change.
• Can be tax-efficient: May reduce Inheritance Tax on your beneficiaries’ estates when they die, depending on how it’s set up.

What to do after setting up a Flexible Life Interest Will Trust?

- Write a Letter of Wishes:
To guide your trustees on how you’d like them to act. We can help you do this.

- Tell your trustees:
Make sure they understand their role, especially how to balance support for your first beneficiary with your second set of beneficiaries.

- Review the trust now and then:
Check the trust still reflects your wishes.

If you have any questions about a Flexible Life Interest Will Trust please contact our team on 020 4525 3605.