Life interest trusts

cherry76

I have read all about the advantages but are there any disadvantages? My friend was asking for my advice apparently most of her elderly friends took that route as they want to protect half of the property from care fees nothing else? She has to own the property as tenants in common if she does and she will have a life interest. The trust will be flexible she can downside, sell etc. The trust will end on their death. I am interested to hear what members on this forum think. Thanks

Yorkshireman99

cherry76 wrote: »

I have read all about the advantages but are there any disadvantages? My friend was asking for my advice apparently most of her elderly friends took that route as they want to protect half of the property from care fees nothing else? She has to own the property as tenants in common if she does and she will have a life interest. The trust will be flexible she can downside, sell etc. The trust will end on their death. I am interested to hear what members on this forum think. Thanks

unless these have drawn up by a trust specialist they may not work. There are a number of companies touting these and charging high fees. Barge pole!

getmore4less

Fairly standard product for wills where you have spouse that want to retain control of the property as the trust contents(1/2 the house) retains the spouse exemption and does not use up transferable nil rate band as the values remains in the survivors estate.

Solicitors have standard clauses for these.

Immediate post death interest in possession trust in wills are not fancy tax saving schemes(in most cases IHT neutral) but do ring fence assets away from secondary grabs like care fees.

For larger estates more complex IHT planning may be needed
(large when you have kids and house is over £850k rising to £l million over the next few years)