Interest in possession trusts
These trusts, also known as life interest trusts, provide the beneficiary (who is often known as the life tenant) with a right to receive the income (interest from savings and dividends from shares) from the trust fund. If the trust holds property then the life tenant has the right to either occupy the property, usually rent free, or to receive the rental income arising from it.
This right can be given to the life tenant for his/her lifetime or for a shorter specified period. When the life tenant dies, or the specified period ends, the property held within the trust then passes to other named persons, known as the remaindermen.
Life interest trusts are very useful for passing assets on to children from an earlier relationship whilst at the same time providing for a new spouse/civil partner or cohabitee. Conversely, people who are in their first marriage/civil partnership or long term relationship who are worried that their partner could remarry after their death can protect their assets by incorporating a life interest trust in their wills. Home owners who have concerns regarding future residential care home fees can plan for such an eventuality by protecting their property in a life interest trust.
For anything further, one of our specialists would be delighted to meet you either in our office or in your own home to talk through your requirements and answer any questions. Please contact us at any time.