Life interest or lease for life
A life interest (also known as a lease for life) gives a person the right to use or have the benefit of a property or other assets for their lifetime or an earlier specified event.
If the Ministry of Social Development considers a client's life interest is a realisable asset, the fair value of the life interest should be included in the client's financial means assessment of assets.
A client will usually get a life interest either:
- from a will (estate) or
- as a condition of gifting or selling an asset (eg to a family member, or a trust)
A life interest gift can generally be identified when:
- the interest is defined
- it is specified when the interest will terminate, eg on death or an earlier extinguishing event and
- it is specified what will happen following termination of the life interest
If the type of life interest is unclear, contact Legal Services for advice.
Calculating the fair value of a life interest
The fair value of a life interest is calculated by the Ministry using the tables in Schedule 2 of the Estate and Gift Duties Act 1968.
The life interest is calculated using the asset values and the client's age on the date they apply for a Residential Care Subsidy.
For more information see:
Legislation
- Means assessment for long-term residential care schedule 2 Residential Care and Disability Support Services Act 2018
- Present value of annuity or other interest for life of male or expectant death of male schedule 2 Estate and Gift Duties Act 1968
