For most couples, their main asset is their home. In many cases, a couple would have worked throughout their working life to pay for it and will be anxious to ensure that, upon their deaths, it passes to their children.
Nowadays it is becoming increasingly regular for people to make Wills, leaving their share in the family home to their spouse, but only for their lifetime.
This is known as a ‘Life Interest’.
It is a mechanism which gives your property, or share of a property, to your co-owner, for them to use for their lifetime, or until certain trigger events occur, such as their re-marriage or co-habitation.
Upon the occurrence of one of the trigger events, or their death, the share of the property is then inherited by the ultimate beneficiaries; usually your children. Therefore, a Life Interest is a way of providing your co-owner with a place to live, for as long as they need it, while protecting your share of the property for your children.
A Life Interest should also provide a degree of flexibility, as circumstances are always subject to change, such as your co-owner needing to ‘downsize’ or move areas. A Life Interest can allow for the property to be sold, and then continue into the next property which has been purchased.
Conditions can also be placed upon the co-owner who enjoys the benefit of interest. For example, they must keep the property insured, in good condition and also pay all of the outgoings on the property.
It is also important to remember that there are several inheritance tax implications as a result of a life interest, which should be fully explained by your legal advisor when the matter is discussed.
For further information please contact us on 01243 790532 or firstname.lastname@example.org at The Owen Kenny Partnership Solicitors.