Flexible Life Interest Trust In Will

[old wrinkly]

First time poster.

My wife and I have mirror image wills which include a Flexible Life Interest Trust.

Whilst discussing changes to our wills recently we became aware that on each death the cost of creating the trust would be approximately £2000 made up of the probate court charge of £215 and if the application is made by a solicitor then the typical cost for what is known as the grant assist service would be in the region of £800 plus VAT (£960)
After probate is granted (and this would apply whether a solicitor is employed or it done by ourselves) the executors then need to set up the trust and change the land registry records accordingly

Typical cost for a solicitor to set up the trust at that time would be around £500 plus VAT (£600) so the rounded figure is approx £2000.

In addition, probate on second death is always more complicated because the first trust needs either winding up set up to continue beyond second-death

As I have said, we were not made aware or missed the details of the charges involved when we setup the trusts in our wills. We mistakenly thought that the fee we paid when our last version of the will was written was all that was involved..

My question is whether the Trust can be ignored, should we choose, when the will is proved and probate granted .

Thanks

[Kati]

Re: Flexible Life Interest Trust In Will

[MENTION=85500]Peridot[/MENTION] should be able to help (I've tagged her) xx

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks, think I have made a mistake and posted again on the open forum (if so can the mods delete it please). How do I post a message for Peridot or will she see my original message from your tag?

[Kati]

Re: Flexible Life Interest Trust In Will

Thanks, think I have made a mistake and posted again on the open forum (if so can the mods delete it please). How do I post a message for Peridot or will she see my original message from your tag?

I'll have a look and remove any repost
@Peridot will see my comment/tag and get directed to this thread xx

EDIT ~ I've deleted the duplicate

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks Kati

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi old wrinkly,
I will need a little more information about your wills to answer I'm afraid. It will very much be down to the drafting, the reason the trust was included and also what powers the trustees have been given, whether a decision to utilise the trust can be made when the time comes. Generally it would be difficult to go against the Will terms.
If the reason for the trust is to protect children from a second marriage for example it may be worth continuing with this. If however the reason was to try and prevent assets being included in any future calculation of care fees once one of you has passed away, then it may be worth re-considering your wills. It is very much down to the reason the trust was created in the first place and how long ago the wills were prepared as to whether a Local Authority would 'look behind' the arrangement and potentially see the creation of the trust as an method of intentionally deprivation for the purposes of care fee calculations. I don't need to know if this was the reason but would say there may be a cheaper alternative. Maybe a right to reside in your residential property until certain events occur for example.
Sorry more questions raised than answers.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks Peridot, will take a closer look at the wills and see what the wording is and post back if appropriate. Would just add that no children are involved. The wills were last written in 2013 at which time the trusts were included but as I say we are having them updated at the moment.

[Peridot]

Re: Flexible Life Interest Trust In Will

Personally I would enjoy what I have and not worry about it too much. Unless you have other dependants you wish to try and help I would keep it simple and ensure that you have lasting powers of attorney appointed if either of you needed any assistance in the future dealing with bills accounts etc.
Any attorney appointed can be informed of your wishes at any point and they are obliged to enable your own decision making for as long as you are able to so covers most bases. Of course if you appointed a professional there would be fees involved but hopefully you have non professionals that you may be able to consider?
First things first deal with your wills and keep it simple in my opinion. Here if you need to ask anything else and hopefully we'll be able to point you in the right direction.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks Peridot, will take a closer look at the wills and see what the wording is and post back if appropriate. Would just add that no children are involved. The wills were last written in 2013 at which time the trusts were included but as I say we are having them updated at the moment.

- - - Updated - - -

oops hit enter twice and cant see any delete option.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks again much appreciated. I confess I have become somewhat what sceptical of the claim being made with trusts where care costs are involved.

It was suggested we change to Lifetime Asset Trust to avoid probate etc. but from what I have read the trusts are as you say being challenged by Local Authorities in some cases. Understand HM Revenue & Customs are now requiring details of trusts on tax returns so it looks like rules are being tightened so could be a lot of money being paid out by people who may find their trusts are not as watertight as they thought..

As with all these things it is a "just in case" scenario and they may never be needed.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Good morning. My wife and I have been talking to our children about our draft revised wills and LPA's and they have raised some questions about the Flexible Life Interest Trust which we aren't sure we can answer as we ourselves aren't too sure how the trust will work in certain circumstances.

Would it be appropriate to post their questions here so we can have a professional answer to give them.

Despite assurances from the firm that have written our wills, and whom we have used for some years now, that the trust cannot be challenged (see quite below):

The local authority can never challenge a trust that has been created by a will as this can never be seen as deprivation by the survivor

They can be as aggressive as they wish, but they still need to be able to prove, with supporting evidence, That trust was set up at a time when care could be foreseen

If you have set up a lifetime trust to protect against future partners and to avoid the need for probate on both first and second death, experience has shown this is virtually impossible to successfully challenge and we always used two trusts so that the worst case scenario is that one will work and you will still avoid the probate

my wife in particular is very concerned that we don't fully understand the implications of the way the current Flexible Life Interest Trust (we have opted against changing to a Lifetime Asset Trust) will work especially now the children have raised their own concerns.

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi Old Wrinkly,
The lawyer is correct that the Local Authority would have to prove the intention behind creating the trust however they are allowed to 'look behind' the trust and the reasons for creation there are of course some circumstances that would 'flag' to them that the reason 'may' be to try and protect assets from being included in any calculation of care fees, such as the age and health of the person creating the trust. They are then able to request information from professionals who have created the wills. Local Authorities are becoming more robust in their investigations and some authorities are pursuing vigorously.
I would suggest that you really need to get some further advice on the trusts that you are/have considered, maybe from another lawyer, to ensure you fully understand the ramifications and the possible pitfalls that may be encountered. To be in a position to decide what is best for you, there needs to be full understanding of what you are creating under the Will. You need to be clear what assets there are and how the trust or no trust will affect various scenarios in addition to know when the Local Authority may challenge.
There are many firms and will writing services out there that will encourage the use of trusts which may or may not work when the time comes but you really need to understand how it will operate for you and the costs involved.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks Peridot, I have no reason to believe the firm I am using are deliberately misleading me but I will have to think about how to proceed as there are more questions than answers.

Two of our friends have recently had will rewrites done by solicitors and in both cases were told they no longer recommend such trusts as they cannot guarantee they will work when needed.

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi,
That is the problem unfortunately. Trusts can be very useful vehicles for some people, but in the majority of situations you can't guarantee that assets can be 'protected' for future generations.
With an aging population who will require more care in the future, the Local Authorities can not afford to fund everyone. Unless you have considerable assets to utilise, unfortunately despite working and saving, purchasing property with the intention of our children benefiting in future will often no longer be possible.
Having seen the standards of care homes out there, I would anticipate that most people would wish to have more than the basic services if they were ever needed, for which you have to pay a premium. The other issue of course is it may not even happen that you require significant care at a later point, but we can never tell.
All I can say is that the Local Authorities are becoming far more robust in exploring any areas of property ownership and wills that may have been created with the intention of protecting assets for future generations and avoiding care fees. Of course the issue only arises in the event the Local Authority are required to assess fees payable, so if this situation is never going to arise then they would have no need to look into the finances and any trusts etc.
You need to really understand exactly what vehicle is being recommended and why before deciding.

[Amethyst]

Re: Flexible Life Interest Trust In Will

Posted on behalf of OP due to some access problems;

Our wills are being revised and include a Flexible Life Interest Trust. Currently we are tenants in common. I have been told that if we revert to joint tenancy then the trust(s) would be ineffective. If we changed to joint tenancy before the trust(s) were activated i.e any time before first death, would the wills still be valid even though they have details of the trust(s) or would we have to have them changed to remove any mention of the trust(s).

Does the deed of trust need to be prepared by whoever wrote the will or can it be done by any solicitor or will writer?