A Revocable Life Interest Trust Will (a RLIT Will) is a method for married couples or registered civil partners to protect the value of their property and assets. In the process it retains all the Inheritance Tax advantages of a simple arrangement.
On the death of the first person in the couple the RLIT Will creates a Trust that acts as a protective shelter for the value of the deceased’s share of assets and property. This Trust treats the surviving person as the primary beneficiary and is designed to ensure that the trust fund is applied for their benefit unless particular circumstances arise.
An RLIT Will can be created if you own your home in your own name, or jointly with another. This property must be owned as Tenants-in-Common, which is a particular legal arrangement. This arrangement can be created at the time of setting up the RLIT Will if it doesn’t already exist.
When a RLIT Will is created you will be asked to name up to four Trustees and these individuals will be responsible for managing the trust after your death. Guidance for these Trustees will be created, usually in the form of a Letter of Wishes, so they are able to carry out their duties in accordance with your wishes.
An RLIT Will allows you to:
- Let your co-owner live in the property rent-free for the rest of their life (or take a lifetime income if
the property is sold).
- If your co-owner chooses to move it gives the Trustees power to sell the property and buy a new one using the proceeds.
- It can protect the value of your estate for your future beneficiaries.
- It can ring-fence the value of your estate should the surviving co-owner need to pay care fees.
- It allows all available Inheritance Tax exemptions and allowances to be kept.
- When the property is sold it allows Capital Gains Tax exemptions to be kept.
- It allows for maximum control and protection to be provided even after the death of the surviving spouse or civil partner
For general informational purposes only, not intended or to be taken as legal advice. To make sure it is appropriate for you please seek advice and contact us.