A Life Interest Will:
Also known as a "Child Protection Will"
This Will involves a trust in your Will, and is well suited to people who have children from more than
one relationship, and want to ensure that their children are looked after correctly.
It can also be suitable for people who are worried that their partner may take up a new relationship
after they have gone.
Suppose that you die at quite a young age leaving a partner and one child. If you make a Simple Will** leaving everything to your surviving partner, then of course your partner will get everything. But what if your partner then has another relationship, and has two more children with the new partner? Your partner will not be forced to leave anything to your child (they could leave it all to the new partner), and even if they do it likely to be split into thirds in this example.
A Life Interest Will can help with this.
Your residue (or a chunk of money if you prefer) is placed into the trust, and the income of that trust is given to a particular beneficiary (eg. your surviving partner?) during their lifetime. So, if you leave money in this trust, and it is invested, the income made on the investment will be available to your beneficiary.
The actual amount of money placed in the trust (the 'trust fund', or ‘capital’) is not usually touched, although it can also be made available to the surviving partner.
The actual capital passes to your children on the second death, or to whomever you stipulate in your Will. So it could not go to the new partner, or new children.
Another potential benefit of these Wills is that assets in a Life Interest Trust may be protected if you have to go into a nursing home – but you must take specialist and subjective advice on this.