LIFE FAMILY TRUST FAQ’S
How can I help preserve my/our estate AND to pass it on to my/our children and grandchildren?
By putting your home (or other assets) into a Lifetime Family trust.
Why is it called a Lifetime Trust?
Because you do it now and not in your Will.
Who then owns the property?
The trust which is administered by your chosen Trustees - normally yourselves.
What rights would I/we have?
The right of occupation for the remainder of your life and as trustees, you can also sell the property and therefore move or downsize.
What about any proceeds of sale?
These can be invested for you to receive the income earned and/or you can receive the capital.
What about when we are no longer around?
The property passes to your chosen beneficiaries via the trust i.e. normally your children.
What about when they are no longer around?
The property passes to your chosen beneficiaries via the trust i.e. normally their children.
What about taxes?
A LFT is entirely neutral for Inheritance Tax and Capital Gains Tax because the transfer is below the IHT threshold and you are still benefitting from the asset. It would qualify as an outright gift if you were NOT a beneficiary of the Trust and ONLY your children/grandchildren were. There is no Income Tax issue if the property produces no income. Should the Trust produce an income in the future then Income Tax would be payable.
What about Probate?
The Trust assets will no longer be subject to Probate on your death because the Trust does not “die” with you.
Who do I need to tell about my LFT?
Your family should know the principles involved but no more is necessary at this stage.
What would happen if they forgot?
All would become clear when your Will is eventually read and actioned.
What if the paperwork cannot be found?
This would potentially be a problem and is why we recommend our Willcare Storage option.
What if my family need help with the paperwork?
We recommend professional assistance.
When will the Trust be finished with?
Whenever your Trustees decide but within the maximum 80 year time limit.
What if the laws change?
We all have to work with the existing Laws and review matters as time goes by.
What if I decide to take out a “equity release” mortgage?
The trust will prevent a mortgage being registered. If you decide to borrow against the property, then you would need to wind up the trust.
What about record keeping?
The Trustees should keep records of all transactions relating to the trust.
What about buildings and contents insurance?
The buildings insurance should be transferred into the names of the trustees. Contents cover should remain in your own name.