Examples of life interest given in a will

Examples of life interest given in a will

Full or broad life interest

• client is beneficiary of a will that says they have the full use, occupation and enjoyment of the estate's property for life
• the word 'use' generally includes any income generated from the property, unless there are other clauses in the will that limit or restrict the life interest
• there may also be provision in the will for the beneficiary to relocate if the residence no longer meets their needs and to purchase a replacement property
• there are no 'extinguishing events' set out in the will which limit the life interest. This means the life interest will remain in place until either the client chooses to transfer or dispose of it, or until the client dies

Limited life interest

• client or their partner has a right to ask the estate administrators for financial support and the estate administrators have 'absolute discretion' to make disbursements of income (payments) to them. (However if the discretion allows the estate administrators to gift estate assets to a beneficiary absolutely, then this may allow for an absolute gift rather than a life interest)
• client or their partner has the right to reside in estate property, but any income generated by the estate goes to another beneficiary of the will (eg a surviving sibling or an adult child of the deceased person) or
• the will sets out the 'extinguishing events' in which the life interest is to end eg when the surviving partner remarries, or leaves the property

Life interest has ended

• the life interest was only a right to occupy the estate's share of the family home. The client has left the property, which has now been sold
• the life interest was limited and the conditions for ending the life interest (an extinguishing event, eg leaving the property) have been met