If you are on your second marriage with children from a previous relationship then I have a story for you…
Once Upon a Time in a Land Far Far Away Cinderella and Snow White waited with trepidation as they watched their father marry the wicked step mother (I mean deep down she was a lovely woman and ultimately, they had a strong and happy relationship but that kind of ruins my story).
As time went by the King started to think about the future- his future, his mortality and the future of his wife and daughters. As princesses both Cinders and Snow were the rightful inheritors of the castle and he wanted to make sure their future was protected but the King was also conscious that he wanted to look after his new wife as well.
After thinking long and hard, the King had the foresight and common sense to speak to Tinkerbell (aka Amanda Harris) to get a FLIT created. The FLIT – or Flexible Life Interest Trust – ensured that after his death the wicked (but secretly lovely) stepmother would get to live in the castle for the remainder of her lifetime but ownership would be controlled by the Trustees (in this case two Fairy God Mothers stepped up to the task) then on her death the trust would revert to a full discretionary trust for the princesses and their descendants.
Simple you see, the princesses got to keep their castle and the King looks after the wicked stepmother as well. And they all lived Happily Ever After…
Let’s be honest, second marriages and step children/parents are nothing unusual these days and as they become more common a FLIT can be a great way to protect value of assets for children and direct descendants whilst allowing a surviving spouse to benefit during their lifetime.
Unlike a standard Will the assets do not pass straight to the survivor upon death but they are, instead, put into a trust. From the trust the survivor is paid any income for the rest of their life which can include the right for them to occupy any property within the estate.
On the occasion of the second death the trust will then become a full discretionary trust for the children and descendants with the capital amount protected for them.
A FLIT is a great way of protecting assets for future generations whilst still giving a surviving spouse rights.
If you have any questions about FLITs and whether they could benefit you please give me a call on 0115 878 0417 or drop me an email on firstname.lastname@example.org