Introduction
A Life Interest Will is a will structure. Instead of leaving your share of the estate to your husband, wife or partner outright, it leaves that share in trust, giving them the right to benefit from it for the rest of their life while the capital is preserved for the people you have chosen to receive it in the end.
Because the survivor's right begins immediately on your death, the arrangement is known in tax terms as an immediate post-death interest, or IPDI. It is one of the most useful structures in estate planning, and it is the answer to a question many couples find difficult: how do I provide for my partner without disinheriting my own children?
How a Life Interest Will Works
Your will places your share of the estate into a trust that comes into being on your death. Two groups of people matter. The life tenant, normally your surviving partner, has the right to benefit during their lifetime. The remaindermen, usually your children, receive the capital when that life interest ends.
What the life tenant is entitled to depends on the assets. With a property it is usually the right to occupy it, and with investments or savings it is usually the income they produce. What they do not get is the capital itself, so it cannot be spent, given away or left to somebody else.
Your trustees hold the assets and administer them, and the trust can be drafted flexibly. It can allow the life tenant to move to a more suitable home, permit trustees to advance capital to them in defined circumstances, and set out who pays for insurance, repairs and outgoings.
The life interest ends on the life tenant's death, and in most drafting it can also be brought to an end if they choose to give it up. At that point the capital passes to your chosen final beneficiaries.
Second Marriages and Blended Families
This is where Life Interest Wills earn their reputation. If you have children from an earlier relationship and you leave everything to your new spouse outright, you are relying entirely on what they do afterwards.
They may make a new will in favour of their own children. They may remarry, and if they die without a will the intestacy rules will favour their new spouse. None of that requires bad faith; it simply follows from the fact that the money became theirs.
A Life Interest Will removes the uncertainty. Your spouse is properly provided for, with a home to live in and income to live on for the rest of their life, and your children know their inheritance is waiting for them. Families tell us it takes the tension out of a subject that was previously unmentionable at Sunday lunch.
For inheritance tax the spouse exemption normally applies to assets passing into an IPDI trust for a surviving spouse or civil partner, and the trust assets are treated as part of the life tenant's estate when the interest ends. We explain what that means for your family's figures before you sign anything.
Care Fees and the Survivor's Share
A Life Interest Will also puts a boundary around what can be assessed if the survivor later needs care.
Because the capital in the trust is not owned by the life tenant, it is not normally treated as their capital in a local authority financial assessment. So your share is protected for your children, while the survivor's own share remains their own and can still be taken into account.
We put that carefully on purpose. This is protection for the share belonging to the partner who has died, not a way of making a family home untouchable, and anyone who tells you otherwise is overselling. Rearranging assets once care is already needed or plainly foreseeable can be treated as deliberate deprivation of assets. Set up as ordinary will planning, in good time, a Life Interest Will does a real and legitimate job.
Life Interest Will or Property Protection Trust?
These two overlap, and the distinction is worth getting straight, because clients often arrive asking for one when they mean the other.
A Life Interest Will is the will structure. It creates the life interest and it can apply to the home, to investments, to income producing assets or to your whole share of the estate. That is what this page is about.
A Property Protection Trust is the product we use for the family home specifically. It concentrates on protecting a half share of the house, and it involves severing the joint tenancy so each half can be dealt with independently. Our Property Protection Trusts page covers that work in full, including the Land Registry side.
In practice many clients need both, with the will providing the structure and the property work making it effective. We look at what you own and tell you which you actually need, rather than selling you both as a matter of routine.
Points to Weigh Up
A Life Interest Will asks more of everyone than a simple will, so go into it with your eyes open:
- Trustees must administer the trust for as long as the life interest lasts, which may be many years.
- The life tenant's rights and obligations need to be spelled out, including repairs, insurance and moving home.
- Trustees have to hold a fair balance between the life tenant and your final beneficiaries.
- There are tax and reporting consequences, including how the trust assets are treated when the interest ends.
- Both partners usually need matching wills for the plan to work whichever of you dies first.
- For a straightforward estate where everything is going to the same children anyway, a simple will may be all you need.
We talk all of this through in plain language, and where a matter needs legal representation we work with a local solicitor and are able to cover any and all of your requirements.
Call us on 0800 048 7320 or use the contact form on our home page to arrange a free consultation.
Frequently Asked Questions
What is a Life Interest Will?
How is a Life Interest Will different from a Property Protection Trust?
Working alongside a local solicitor
We work with a local solicitor and are able to cover any and all of your requirements. If in doubt, call us on 0800 048 7320 and ask, or use the contact form on our home page.
Related Services
Property Trusts
Protect your half of the family home so it passes to your chosen beneficiaries. We handle the severance of the joint tenancy and the will trust that goes with it.
Learn MoreWills
Secure your legacy by ensuring your estate is distributed according to your precise wishes with a legally valid Will. Without one, statutory rules determine how your assets are divided.
Learn MoreTrusts
Safeguard your assets, provide for your loved ones, and prevent potential complications through customized trust arrangements tailored specifically to your family's circumstances.
Learn MoreProvide for your partner and your children
We will explain whether a Life Interest Will, a Property Protection Trust or both is the right answer for you.
