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  1. #1
    old wrinkly's Avatar

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    Default Flexible Life Interest Trust In Will

    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

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    Kati's Avatar

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    Default Re: Flexible Life Interest Trust In Will

    @Peridot should be able to help (I've tagged her) xx
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    old wrinkly's Avatar

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    Default 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?

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    Kati's Avatar

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    Default Re: Flexible Life Interest Trust In Will

    Quote Originally Posted by old wrinkly View Post
    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
    Debt is like any other trap, easy enough to get into, but hard enough to get out of.

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    old wrinkly's Avatar

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    Default Re: Flexible Life Interest Trust In Will

    Thanks Kati

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    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

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    old wrinkly's Avatar

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    Default 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.

  8. #8
    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

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    old wrinkly's Avatar

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    Default 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.

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    old wrinkly's Avatar

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    Default 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.

  11. #11
    old wrinkly's Avatar

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    Default 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.


  12. #12
    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

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    old wrinkly's Avatar

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    Default 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.

  14. #14
    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

  15. #15
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    Default 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?
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  16. #16
    Peridot's Avatar

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    Default 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.
    Last edited by Peridot; 8th November 2017 at 21:17:PM. Reason: Typo
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

  17. #17
    old wrinkly's Avatar

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    Default 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,

  18. #18
    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

  19. #19
    old wrinkly's Avatar

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    Default 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)
    Last edited by old wrinkly; 9th November 2017 at 08:36:AM.

  20. #20
    Peridot's Avatar

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    Default 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.
    I am a qualified solicitor employed by the LegalBeagles forum to provide guidance on a wide range of legal queries. I am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

  21. #21
    old wrinkly's Avatar

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    Default 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.

  22. #22
    old wrinkly's Avatar

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    Default 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.

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