Flexible Lifetime Interest Trust

Commonly referred to as the ‘ideal modern Will’. Ensures the testator provides for his or her spouse, by providing them with the income from the entirety of their residuary estate. Has additional flexibility as the Trustees are able to advance capital, either as a gift or a loan, whilst preserving as much of the capital as possible for the deceased’s chosen beneficiaries. Particularly beneficial for high net worth clients as the trust is written to allow mitigation of IHT after first death (not a tax saving tool in itself; additional advice will be required). Often preferable for younger couples who do not wish to undertake aggressive IHT mitigation as it allows for tax planning to be implemented in the event either of them dies. Spousal exemption will apply on first death (provided the clients are married/civil partner’s) resulting in the survivor’s Personal Representatives having the ability to claim a Transferable Nil Rate Band on second death. Requires all jointly owned assets to be held as tenants- in- common (one severance prepared without charge if required).