Understanding Life Interest Trusts

Posted: 05 September 2025

A life interest trust enables you to preserve the value of your estate for future generations. These trusts are usually included in wills for the preservation of properties.

Benefits for Blended Families

Blended families often benefit from a life interest trust. This can ensure your spouse, civil partner, or cohabitee can remain in the family home or receive income from your assets during their lifetime. It also preserves the capital for your children on the second death.

Protecting Against Care Fees

They are also beneficial where there are concerns that care fees are going to severely impact an estate and you wish to preserve capital for other family members.

Safeguarding Against Remarriage

If there are potential concerns that the surviving owner of the property may remarry, a life interest trust will protect the first owner’s intended beneficiaries.

Providing Reassurance for Families

Trusts can offer reassurance for all parties and help avoid difficult situations later on.

Cohabitees and Tax Considerations

It is also important to note that, if you’re planning to include a cohabitee in your arrangements, it’s especially important to seek both legal and tax advice. Unlike spouses and civil partners, cohabiting partners aren’t entitled to the same inheritance tax exemptions.

How Property Ownership Affects Life Interest Trusts

In order for a life interest trust to pass under the will and into the trust, the owners of the property will need to hold it as ‘tenants in common’ rather than ‘joint tenants’.

If the property is held as joint tenants, it will automatically pass to the survivor on the first death under the rules of survivorship. As such, it will not be capable of passing into the trust.

However, if the property is held under a joint tenancy by the date of death, it is possible for the survivor to retrospectively sever the joint tenancy.

How We Can Help

At THB, as part of our file requirements, we will purchase a copy of the Registers of Title for your property to establish how the property is held. We can then assist you with severing your joint tenancy, if required.

Get in Touch

For more information, please contact our team today! Private Client team experts – call 01245 493577 or send us an email. Our specialists are here to help you.

Author: Emma Blakesley

Emma Blakesley specialises in Wills and Probate and is based in our Great Baddow, Chelmsford office. She advises clients across all areas of Private Client law, including wills, estate planning, probate and estate administration, Lasting Powers of Attorney, and Court of Protection matters. Known for her thoughtful, client-centred approach, Emma strives to make even complex legal matters feel straightforward and supportive.