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In a second marriage? Secure your legacy

21st Mar 2024
Brought to you by
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For nearly two decades, Davenport Thomas’s highly experienced team has worked closely with numerous accountancy practices to support their clients with a wide range of financial planning needs.

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Second marriages bring unique considerations when it comes to financial planning. Among them, safeguarding assets for children from prior relationships is likely to take precedence. This is where a life interest trust, (also known as an ‘interest in possession’ trust) can be valuable as a legal mechanism that can add clarity and protection for your loved ones.

In a second marriage? Secure your legacy | Davenport Thomas | Couple, calculator, Japanese bank books and marriage ring
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A life interest trust ensures that assets are held for the benefit of someone during their lifetime, with the remainder going to other beneficiaries on their death. Such an arrangement is particularly advantageous for those entering second marriages, where concerns about inheritance for children from previous unions loom large.

 

Control and security

One key benefit of a life interest trust is control. Setting up a trust allows individuals to dictate precisely how their assets are distributed, ensuring their children receive their rightful inheritance. This control extends beyond death, as the surviving spouse is granted access to the assets during their lifetime but cannot alter the ultimate distribution.

Moreover, a life interest trust provides financial security for the surviving spouse without compromising the interests of the children. The surviving spouse is entitled to receive income generated by the trust assets, such as dividends or rental income, ensuring their financial well-being. Meanwhile, the capital remains intact for eventual distribution to the designated beneficiaries.

Such an arrangement also offers protection against unforeseen circumstances. Should the surviving spouse remarry, encounter financial difficulties or require long-term care, the assets within the trust remain shielded.

Passing on property

In the scenario of leaving a property where half is designated for children upon the first spouse's death, this type of trust can offer an effective solution. The surviving spouse has a life interest in the property, allowing them to live in it during their lifetime. On the death of the surviving spouse, the property's ownership would then pass to the children, fulfilling the deceased spouse's wishes. This arrangement safeguards both the surviving spouse's interests and the children's future inheritance.

Navigating the complexities

With clear provisions in place, disputes over inheritance can be minimised. However, navigating the intricacies of estate planning, especially in the context of second marriages, requires expert guidance. Seeking advice from a qualified financial adviser is crucial to ensure the trust is tailored to your specific needs and circumstances.

RJM and Associates (Hampton) Ltd understands complex issues such as these, having a wealth of experience in this field. So, for a discussion about how we can help, you can book directly into our diary here, email us or call us.

David's contact details are:

Calendly - David Fear

Tel number 0208 8192407

Email: [email protected].

 

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The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.

RJM and Associates (Hampton) Ltd is authorised and regulated by the Financial Conduct Authority.