Your Will – What is a “Life Interest”?

When the Life Tenant dies, ownership of the property then passes in accordance with the provisions of the Will to the beneficiary. 

EXAMPLE 1:-

A life interest could arise in the case of a second marriage, where there are competing needs to provide for a spouse against the needs to preserve the assets for the benefit of the testator’s children. In this scenario, the spouse is allowed to reside in the house until he/she dies and the house then passes to the children in accordance with the terms of the Will.

EXAMPLE 2:-

It may also occur when the testator and his/her spouse have young children together and it is discussed that one of them re-partner after the death of the testator. In this situation, a life interest could be beneficial to secure the family home for the upbringing of the children with that asset passing to the testator’s children, once they become adults.

When considering a “Life Interest” provision in your Will please consider the following:

• Who will be responsible for the payment of rates, taxes and other outgoings, insurances, other expenses, liabilities affecting the property, upkeep and maintenance of the property?
• What will the consequences be if the Life Tenant does not comply with his or her obligations and responsibilities?
• Does the Life Tenant have the exclusive / sole right to live in the property?