When you’re planning for the future, one of the biggest priorities is often making sure the people you care about are looked after.
You may want your husband, wife or partner to remain financially secure after you’re gone, while also ensuring that your children or other chosen beneficiaries inherit your assets in the future.
A life interest trust can help you achieve both. Included as part of your Will, it can provide peace of mind that your loved ones are protected in the way you intended.
What is a life interest trust?
A life interest trust is a type of trust that’s written into your Will. It allows one person to benefit from certain assets during their lifetime, while protecting those assets for someone else in the future.
In simple terms, it allows you to say:
“I want my spouse or partner to benefit from part of my estate while they’re alive, but when they’ve passed away, I’d like those assets to pass to my children or other chosen beneficiaries.”
Unlike leaving assets to someone outright, a life interest trust helps ensure those assets ultimately pass to the people you’ve chosen.
For example, your spouse or partner may be able to continue living in your home for the rest of their life, or receive income from savings or investments held within the trust. When they pass away, those assets are then distributed to your chosen beneficiaries.
When might a life interest trust be right for you?
Every family is different, but a life interest trust can be particularly helpful if you want to balance looking after your partner with protecting your family’s future inheritance.
It may be worth considering if:
- You have children from a previous relationship.
- You’re in a second marriage or long-term partnership.
- You’d like your spouse or partner to remain in the family home after your death.
- You want greater certainty over who will eventually inherit your assets.
- You’re thinking ahead about protecting family wealth for future generations.
For many families, it provides reassurance that everyone will be looked after in the way you intended.
How does a life interest trust work?
When you pass away, the assets included in the trust are looked after by trustees you’ve appointed in your Will.
The person benefiting from the trust – often your spouse or partner – can continue to use those assets during their lifetime. This might mean continuing to live in the family home or receiving income generated by investments.
When they pass away, the assets are then passed to the beneficiaries you’ve named in your Will.
This allows you to support your partner during their lifetime while keeping control over who ultimately inherits your estate.
What are the benefits of a life interest trust?
Depending on your circumstances, a life interest trust can offer a number of benefits.
It can:
- Provide financial security for your spouse or partner.
- Help ensure your children or chosen beneficiaries inherit your assets in the future.
- Offer greater certainty over how your estate is distributed.
- Help preserve part of the family home for future beneficiaries in some circumstances if the surviving partner later requires residential care. Whether this applies will depend on your individual circumstances, so it’s important to take professional advice.
- Give you confidence that your wishes will continue to be respected long after you’re gone.
Is a life interest trust right for everyone?
Not necessarily.
Every family has different priorities, and a life interest trust won’t be the right solution for everyone.
The best approach will depend on your personal circumstances, your family relationships and what you’d like your Will to achieve.
Taking advice allows you to explore the options available and decide what feels right for you and your loved ones.
Planning ahead with confidence
One of the greatest benefits of making a Will is knowing that you’ve taken the time to plan ahead for the people who matter most.
For some families, a life interest trust can provide an extra layer of reassurance by balancing the needs of a surviving spouse or partner with the wishes you have for future generations.
At Belcher Addison, we take the time to understand your circumstances and explain your options in plain English. We’ll never recommend something you don’t need – instead, we’ll help you decide whether a life interest trust is the right solution for you and your family.
If you’re reviewing your Will, planning for the future or simply wondering whether a life interest trust could be beneficial, we’d be delighted to help.
Get in touch with our friendly Private Client team for a no-obligation conversation. We’ll answer your questions, explain your options clearly and help you put the right plans in place for the future
