Life Time Interest Trusts
A Flexible Life Interest Trust (FLIT) in your Will offers greater peace of mind if you have significant assets or investments as well as property, and wish to protect their value for future generations. A FLIT if often described as the ideal modern Will Trust, as it allows for adequate provision for the surviving spouse/partner, whilst incorporating flexibility into the Will whereby other family members/beneficiaries may benefit should the survivor not require the provision after the first death.
A FLIT is usually used for people have multiple properties or assets. If you only have a main residence then a basic Will Trust SEV would be appropriate for you. This would be discussed with your Consultant.
The FLIT is flexible because it allows the Trustees to advance capital as well as income to the survivor.
This Trust is created on the death of the first spouse/partner and the capital assets of the deceased are held in a trust which pays any income generated to the survivor for their lifetime. On the death of the survivor, the trust capital is passed to nominated beneficiaries, such as children. Because the capital in the trust is not owned by the surviving spouse/partner, it cannot be given away by them to, say, a new spouse or partner, and it cannot be assessed if the survivor needs to end their days in a care home.
Guarantees who will benefit from your cash assets and investments as well as property if your surviving spouse/partner either remarries, enters into a new relationship or writes a new Will after your death;
Allows a nominated person to benefit from the income generated from your investments when you are gone, whilst protecting the capital value for future generations; and
Reduce the potential impact of residential care fees on the value of your estate should your surviving partner go into care.
Other points of note
It is possible to incorporate a less flexible version of this trust into a Will which removes the flexibility to advance capital to the survivor – limiting the surviving spouse/partner to only the income from the trust.