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Life Interest Trusts

Commonly known as Life Interest or Interest in Possession Trusts.  These are useful for couples who are married or in a civil partnership who wish to protect their respective shares in their property (or some other asset – see below).  They work by allowing the surviving spouse/civil partner to remain living in or taking rental income from the home for their lifetime but on their death, the share owned by the first to die passes to the beneficiary(ies) named in their Will (called “remaindermen”) and not the Will of the second spouse/civil partner.


In order for this type of Will Trust to apply, the ownership of the shared home must be registered with the Land Registry as “Tenants in Common” (and not “Joint Tenants”). 

The person granted the life interest is known as the “Life Tenant”.  They are granted full use and enjoyment of the property (whether as a residence or rental income) and they may be allowed to downsize and use the full proceeds of sale to put towards the purchase of a smaller property but they never legally “own” the Trust’s share, which is held in the names of Trustees for the remaindermen beneficiaries.


These types of trusts are particularly useful for the following married / civil partnership clients: - 

  • who have children from previous relationships (blended families). 

  • who have no children but wish to leave their respective estate to different beneficiaries. 

  • who wish to protect their personal estate in the event of the re-marriage of their surviving spouse/partner. 

  • who are concerned about the cost of care home fees and the means to pay them (please see my previous article on this topic, “Protecting the Family Home from Care Fees” – 31 July 2023). 

I briefly mentioned above that these trusts do not necessarily have to be for the family home but they can be for all manner of assets, including investment portfolios, family heirlooms, and other types of land or property to name a few.  Indeed, the whole estate can be placed into a Life Interest Trust, if so wished.  However, it is important to consider, when creating this type of Will Trust, whether the surviving spouse will be sufficiently provided for during their lifetime because they will only be entitled to income from the assets held in trust and not the capital. 

If you wish to discuss this option for your Will, please contact our Wills team for a free ½ hour consultation, we will be happy to advise you. 

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