How Does a Liferent Trust Work?

A liferent trust (or trust liferent) is a trust which, when settled, confers a use and income benefit, or both, in the trust property upon a beneficiary or beneficiaries. The beneficiary enjoying the use or fruits of the trust property is known as the liferenter.

Does a liferent trust last for someone's lifetime?

The default position is that the liferent does in fact last for life, although no rent is payable. If a liferent is used it is also wise to specify in the Will/trust who will be responsible for arranging and paying insurance, maintenance and other costs.

Are lifetime trusts a good idea?

Establishing trusts can give you an element of control over assets you wouldn't have if you gave them away outright. There can also be tax advantages, but that should never be the main reason for setting one up. In some cases, you could end up paying more tax by putting assets into trust.