Revocable Life Interest Trust in a Will

I have a situation where a married man has a wife who is a similar age to his son.

The estate is fluid as there is a large ploy of land with a number of dwellings some being built and others awaiting planning.

The testator wishes to make good provision for his wife (via life interest as she has no family) and his son.

On reading Drafting Trusts and will trusts 10th edition I feel that a revocable life trust to the spouse and a letter of wishes from the testator would be a good solution. That way there is no inheritance tax payable and any later appointments to the son would be treated as a pet form the spouse. As they are a similar age again I think this is a good fit.

I am assuming that the spouse would need to agree to any appointment to the son but I would appreciate clarification on this. I would also appreciate any comments on how this will is drafted . I would appreciate any pointers as to the drafting of such a revocable life interest trust. is it just a matter of making changes to one of the Kessler precedents.

Collette Hodkinson

CPH Solicitors

I would take careful instructions form the testator about limiting the capital the wife can ask for and her power to revoke, otherwise the merry widow can swan off into the sunset and disinherit the, adult, son. Is she likely to PET to her stepson? .If they are of similar age will the son ever benefit during his lifetime? Is that the intention?

Iain Cameron

Having recently dealt with the probate in relation to a similar estate, I would recommend that the spouse not be made an executor (so that she has no practical veto over distributions to the son) and that you ensure that the testator leaves a clear letter of wishes, establishing:
(a) which parts of the estate should be appointed to the son in the short term;
(b) then how much should be retained for the wife - which could be a home plus a certain income or income producing fund; and
© circumstances in which capital can be appointed to her - which might include a small initial sum and then further contingencies, such as the trust fund income falling below a certain level.

Relations may be cordial but the best way to keep them friendly is for the testator to set his wishes out clearly and ideally discuss them with his wife and son so there are no surprises. In the absence of knowledge and clarity, the death will leave the widow concerned as to her position and can lead to “unfortunate” conversations and a reluctance to see assets passing on to the son. Full disclosure will also dramatically reduce the risk of a 1975 Act claim - whether merited or not.

The Kessler precedent for a spousal life interest will should require minimal amendment.

Andrew Goodman
Osborne Clarke LLP