Will Trusts

Will Trusts 

Protective Property Trust (PPT) 

Client objectives: Partial asset protection, as well as to pass on the right to occupy the main residence (for client’s share) to spouse/partner for stipulated time or conditions, after which will be inherited by client’s children, lineal descendants or loved ones.

Suitable assets: Main residence with estate value within the Nil Rate Band and Residence Nil Rate Band

Key features of solution: This is a Trust featured within the Will(s) and comes in effect after client passes away. The asset held in Trust is ringfenced from financial predation and potential care costs of surviving spouse or partner. The transfer of right to occupy can benefit from spousal exemption for IHT as applicable, and transfers to children and lineal descendants can benefit from the Nil Rate Band and Residence Nil Rate Band.

Life Interest Trust (LIT) or Flexible Life Interest Trust (FLIT) 

Client objectives: Partial asset protection, pass on the right to occupy the main residence (for client’s share) to spouse/partner for life as well as the right to income from savings, after which the share of main residence and savings will be inherited by client’s children, lineal descendants or loved ones.

Suitable assets: Main residence and savings with estate value within the Nil Rate Band and Residence Nil Rate Band

Key features of solution: This is a Trust featured within the Will(s) and comes in effect after client passes away. The assets held in Life Interest Trust is ringfenced from financial predation and potential care costs of surviving spouse or partner. The transfer of right to occupy and savings can benefit from spousal exemption for IHT as applicable, and transfers to children and lineal descendants can benefit from Nil Rate Band and Residence Nil Rate Band. A Life Interest Trust provides the surviving spouse or partner a right to occupy main residence and income from the savings, while a Flexible Life Interest Trust (FLIT) provides additional discretion for surviving spouse or partner to access the capital held in the Trust as well. The FLIT helps mitigate for generational IHT as the assets are finally held in a Discretionary Trust with potential beneficiaries being children, grandchildren or lineal descendants.

Discretionary Trust (DT)

Client objectives: Partial asset protection and pass on the share of main residence and savings to a Trust for the potential benefit of spouse/partner and or client’s children, lineal descendants or loved ones.

Suitable assets: Main residence, savings and other assets with estate value within the Nil Rate Band and Residence Nil Rate Band.

Key features of solution: The main residence, savings and other assets are held in a Discretionary Trust without any life interest for anyone, and for the benefit of a list of potential beneficiaries. The Trustee(s) have discretion on the amount and timing of capital and or income distribution, as well as the beneficiaries. Given the discretion with the Trustees, the assets don’t form part of any of potential beneficiaries’ estate and thereby mitigates generational IHT for lineal descendants.