Flexible Life Interest Trust In Will

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi again,
Sorry you’ve had issues getting back on, but we got there in the end!

Ok, so if you revert to joint tenants at any point before the first of you passes away, then the property will automatically pass to the survivor of you when the time comes. So neither of you would have a specified ‘share’ of the property that can be put into the trust on death for the life time of the survivor. The rest of your wills would be valid the life interest trust just wouldn’t happen as there is nothing to go into it to set it up so to speak.

I hope that clarifies things if not do ask and I can try and explain it another way.

Your next query would it have to be the same solicitor who prepared the wills that would prepare the deed. If you are tenants in common currently and there is no deed in place then the assumption would be that you each have 50% share of the property that you can then will to whoever you want when the time comes. You would need a deed preparing, only if you were going to hold the property in unequal shares, otherwise a deed wouldn’t be necessary.

If a deed were necessary, then it doesn’t have to be prepared by the same person who prepared the will but I think you need to get it straight what you are trying to achieve here as talk of deeds when you mention reverting to joint tenants is causing some confusion. If joint tenants is what you want to do, then a deed would be unnecessary. You can contact the Land Registry yourself to deal with this if needs be and may be worth considering once you have decided exactly what you wish to achieve.

Are you considering leaving your wills as they are rather than changing them? I may have misunderstood but am unsure why you would go to the expense of preparing new wills that include a flexible life interest trust if you don’t intend using it?

Sorry done the same again more questions, but hopefully we can get to the bottom of what you want to do and point you in the right direction.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks for the reply,got on eventually. We are having new wills prepared to make beneficial changes and change of executors. The wills currently have the Flexible Life Interest Trust included but my wife is still uncertain as to whether she wishes to retain it now that she knows it will probably, according to the will writer, cost £2000 at today’s prices to enable it at first death. She is also still unclear of some of the implications despite exchanging repeated emails with the will writer over the last 2-3 weeks to clarify points.

Your answer about the effect on the trust of changing back to joint tenancy is really useful, that’s one question done and dusted.

I have posted on the Land Registry forum questions about changing back from tenants in common to joint tenancy and everything I have read refers to a trust deed but I have been unable to get clear in my mind what that is exactly. The deed is only to affect the change to joint tenancy.

As the wills will not need to be changed, one option is for us to get the new wills completed, including the trusts, so that the new executors/beneficiaries are in place and then we can, if need, do the tenancy change later. I have had a price from our will writers of £400 to do the title deed which seems high and I’m not sure if it includes making the application to the Land Registry. I assume it’s probably a good idea to shop around to see if I can get the cost down,

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi again,
Here’s the link to HMLR https://www.gov.uk/joint-property-ow...-joint-tenants which does indicate a trust deed would be needed to convert back to a joint tenancy.

It is not a difficult deed to prepare although I’m not sure you’d be able to find a template to complete this yourself.

If the quote is for the creation, execution and registration of the deed with the land registry together with the relevant application form, then it probably isn’t a ridiculous price.

Another option may be to change the wills leaving your property shares to each other. It would mean that a grant of probate was needed to enable the property to be transferred into the sole name of the survivor, whereas if you were joint tenants all that is needed would be a certified copy of the death certificate to put the property into the survivors sole name.

Even more options! Nothing is ever straightforward I’m afraid. It is sensible to take your time about it particularly when you need to consider the costs involved in taking any action and what you actually want to achieve.

Here if you need us.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks again for some sound advice.

As I have said before despite much exchange of information my wife remains sceptical about having the trust. The original premise of reducing liability for potential care costs seemed clear but now, some 4 years on is not so clear, and she feels, and I share some of her unease, that it would be easier for our executors (who will be our children) to administer the will, if there was no trust element.

The gamble of course if not being able to predict whether one of us might end up in care..........but that's a judgement call.

For clarity, If we decide to leave our property shares to each other, the property would remain as tenants in common until first death when the probate would be the authority for the HMLR to change the property title to single ownership. i.e we would not need to make any change in title at the moment?

Are there likely to be any issues with obtaining probate if that's what we decide?

If we follow that route am I right to assume we that we will not need to include the trust in our revised wills?

Also, I assume this is something our will writers can do quite simply and that the wills would be 100% legal i.e there will be no problem in the future administering the will(s)

[Peridot]

Re: Flexible Life Interest Trust In Will

Hi again,
In a nutshell yes you’ve got it.

You can remain tenants in common and will your share of the house to each other. In the usual course of things leaving your estate to your spouse would not require a Grant of Probate to deal with it. However in a situation of tenants in common the HMLR would need the Grant to enable the transfer to the survivor of you’s sole name.

Trusts have their place but I wouldn’t rely on it 100% in relation to the question of care fees, as you say a judgment call.

If you have new ‘basic’ wills prepared at this stage then you can leave the trust out if that’s what you decide. Obtaining probate is not an issue, in a straightforward estate.

You can always change how you hold the property at a later date and no it doesn’t need to be the same lawyer who dealt with the wills dealing with the property title.

As ever here if you need us.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Hi Peridot, could not have wished for a clearer answer.

The decision is now my wifes and mine to make as which option to take.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Sorry to come back again but just in the process of drafting our instructions to our will writers and it struck me that I should have asked whether continuining to hold the property as tenants in common would have any influence on care cost assesment by the Local Authority if one of us needed care (I'm assuming residential care) whilst we are both alive.

[Peridot]

Re: Flexible Life Interest Trust In Will

Sorry Old Wrinkly I missed the most recent post.
As far as care fees and tenants in common issues are concerned, the local authority can’t insist on making anyone homeless should one of you need to go into care and the other remains in the matrimonial home. The issue arises once one of you has passed away and the survivor of you needs to go into care. The local authority will then include whatever share of the property they own in any calculation of fees.
If you leave each other your share of the property then the survivor will own the whole property and therefore the whole value will be included in the survivors asset values. If you were to will your half share (with a right to reside for the survivor) then only the half share value would be included in the fee calculation.
Hopefully neither of you will require full time care in any event, but if you do then owning a property will take you into the bracket of having to be responsible for any fees I’m afraid.
The luxury of leaving assets to children is unfortunately on a downward slope with us all living so much longer, unless you are super wealthy or very poor. Having said that I’m sure Family would want the best for you. Try not to worry about things that may never happen.

[old wrinkly]

Re: Flexible Life Interest Trust In Will

Thanks for the update and no problem with the delay.

habe now instructed our will writers to proceed on basis of your earlier suggestion and sort everything out re the property with Grant of Probate when the time comes. Not had any feedback yet.

My wife feels a lot easier now that we have eliminated the trust from the wills.

I fear your comments about care costs are all too true but hopefully we will never have to face that problem.

Thanks for all the advice it has been very informative and is greatly appreciated.