What happens to a trust when a life tenant dies?

Some trusts are set up so that on the death of the Life Tenant, the trust assets remain held in discretionary trusts for a range of beneficiaries. It is then up to the Trustees to decide which beneficiaries receive trust assets, and when this happens.

Can a life assured be a trustee?

The persons who are, or may become, entitled to receive the policy proceeds are called the beneficiaries. The persons who control the trust property, that is the life assurance policy or investment bond, and make sure the terms of the trust are carried out, are called the trustees.

Can a trust be a life tenant?

A life interest trust included in a Will is a legal entity which is set up in such a way that allows assets belonging to the deceased to be placed within the trust for the benefit of a named individual, usually the surviving spouse, known as the ‘life tenant’.

Why do you need a trustee for life insurance?

Why have a trust? Trusts are often used with life policies, primarily to speed up the payment of a claim and as a means to reduce a possible inheritance tax liability or to provide funds to help pay an inheritance tax bill.

What is a trustee of life insurance policy?

Trustee – the person(s) who looks after the contents of the trust on behalf of the beneficiary(ies) – normally trustees are the settlor themselves, and at least one other person, someone else the settlor trusts and who is likely to outlive them. Beneficiary – the person(s) who can benefit from the trust.

Can a trust have more than one remainderman?

However, the creator of a trust may reserve a life estate for himself or, in the case of a couple, for the survivor. Life estates are usually created to avoid probate or for tax benefits. With a life estate, there can be a single remainderman or two of more joint remaindermen.

How does a life estate differ from a remainderman?

Life Estates and Remaindermen. A will or a trust can create various types of interests in property, depending upon how the property is distributed. A life estate is an interest in property that is created when a person making a will or trust gives another person the use of property only during the other person’s lifetime.

Who is the remainder man in real estate?

One complicating factor to life estate deeds, especially in real estate dealings, is that all parties need to be aware that both the life tenant and the remainderman have ownership interests, despite each having different rights of possession. The life tenant is the owner of the property until they die.

What are CGT and life and remainder interests in a trust?

Furthermore, the Commissioner defines the equitable interests of the beneficiaries as separate CGT assets – their respective equitable life and remainder interests6. The Ruling states that the creation of equitable LRIs involves the creation of a trust over an original asset and applies the following CGT treatment. Creation of trust

Can a remainder beneficiary be a trustee?

But in any case in which there might be disagreement, the Petition for Instructions is a good safeguard for the trustee. Remainder beneficiaries are important, and their interests need to be considered in administering a trust. But the income beneficiary’s interest is usually paramount.