At Keily Legal, based in Billericay and serving clients across Essex, we’ve always believed estate planning should give you peace of mind and flexibility. Families today often have complex dynamics – second marriages, blended families, businesses, and long-term care concerns. A Flexible Life Interest Trust (FLIT) is one of the most modern, adaptable ways to make sure your wishes are respected and your loved ones protected.
What is a FLIT?
A Flexible Life Interest Trust (often called the “ideal modern family trust”) lets you look after your spouse or partner immediately after your death, while also safeguarding assets for your children or other beneficiaries in the long term.
Here’s how it works:
- Your surviving spouse (or partner) becomes the life tenant, meaning they are entitled to the income from the trust during their lifetime.
- Trustees (who you choose) can also decide whether to release capital – either as an outright gift or as a loan.
- When the life tenant passes away, the trust automatically becomes a discretionary trust, giving ongoing protection for children or other beneficiaries – for up to 125 years.
Why are FLITs so flexible?
The beauty of a FLIT lies in its name: flexibility. The trustees aren’t restricted to just looking after the life tenant. They can also make decisions that help your wider family.
For example, if one of your children needs help with a house deposit or paying off a mortgage, the trustees could step in and use trust assets for that. This is where a carefully drafted letter of wishes becomes important – giving your trustees guidance about how you’d like the trust to be managed.
Advantages of a FLIT
For many of our clients in Billericay and across Essex, a FLIT offers the perfect balance of protection and adaptability:
* Protects assets for your children and future generations.
* Shields the estate if your surviving spouse remarries, divorces, or goes into care.
* Assets belong to the trust, not individuals – meaning they’re safeguarded from creditors and third-party claims.
*. Can be structured to reduce Inheritance Tax (IHT) exposure, including using loans to beneficiaries.
* No anniversary or exit charges during the life tenant’s lifetime.
*. Trustees can adapt if tax laws change – even converting the trust into another structure if needed.
Things to be aware of
* The main drawback is that when the life tenant dies, the trust is no longer an Immediate Post-Death Interest trust. It becomes a discretionary trust, which means anniversary and exit charges may apply in the future.
* There’s also a limitation with the Residence Nil Rate Band (RNRB) – if your home passes into a FLIT, the RNRB will not usually apply, because the property doesn’t pass outright to children or grandchildren.
Why consider a FLIT in Essex?
At Keily Legal, we see FLITs as part of a modern estate planning toolkit. They’re especially useful if you want:
- To look after a spouse or partner, but ensure children from a first marriage also inherit.
- To protect wealth from care home fees or second marriages.
- To leave behind a lasting legacy that adapts to family needs over time.
We know that setting up a trust can feel daunting. At Keily Legal, we make it simple. We’ll explain everything in plain English, tailoring the structure to fit your family and financial situation. You’ll leave with the confidence that your loved ones are truly protected.
Next steps
If you’re based in Billericay, Brentwood, Chelmsford, or anywhere in Essex, and want to explore whether a Flexible Life Interest Trust is right for your family, our friendly team is here to help.
Call us on 01277841152
Visit us at www.keily.legal