Lifetime Trust

What is a Lifetime Trust?

A Lifetime Trust is a process which enables you to protect your property or assets whilst you are alive. Unlike Will Trusts which come into force on your death, a Lifetime Trust allows you to gift your property or assets into a Trust and you are allowed to carry on using the asset and living in the property. The advantages in doing this are huge.

Reducing Probate Costs

You can set up a Lifetime Trust and transfer the bulk of your assets (if under £300,000) into that Trust. If you do so, then when you die there will be no probate required and therefore no probate costs (this would be approx £1000).

Sideways Disinheritance

For a couple, when one person dies, the survivor will typically have the benefit of the deceased person’s assets. If the survivor re-marries then those assets may pass to a new spouse. By placing assets in a Lifetime Trust before death, this removes the risk of those assets being inherited by someone else’s family.

Children Inheriting At The Wrong Time

Unfortunately it is not uncommon for someone in a family to have problems such as alcohol, drug, gambling, volatile marriages or inheritance tax problems, plus 1 in 2 marriages ends in divorce. Assets placed in a Lifetime Trust, can have discretionary rules put in place as to when an inheritance is passed on.

Reducing the burden of Care Costs

At present, 1 in 3 women over 65 and 1 in 4 men are likely to go into care. For the next generation aged between 45 and 65 it is anticipated that 1 in 2 will go into care. Assets held in Trust are normally disregarded for care purposes provided that the Trust has been set up correctly and the assets ‘ring-fenced’ at the right time. If you were fit and healthy when setting up the Trust and could not have foreseen the need for care then the local Authority cannot make the assumption that your motive in setting up the Lifetime Trust was to avoid care home fees.

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