Solihull: 0121 705 7571
Dorridge: 01564 779393

The advantages and disadvantages of incorporating a life interest trust in your Will for a jointly owned property.

May 3, 2023

A life interest trust can be created by Will on the death of the first homeowner to die. This means that the surviving owner can live in the property during their lifetime but when they die the house then passes to a third party.

For this to be possible, the owners must hold their home as tenants in common. Using an example of a married couple, where Jack owns 50% and Jill owns 50%. Jack and Jill give each other a life interest in their retrospective 50% share. Jack has died first and so Jill has the right to live in the house as a whole for the rest of her life. However, Jill still only owns 50% of the house, she just has the right to live in the remaining half.

When the second spouse eventually dies, it is quite common for the two Wills of the spouses to state that the house should pass to the children, although this doesn’t have to be the case.

Can my spouse sell the house and buy another?

Yes, they can. However, they will still only be entitled to their 50% share, with the right to live in the house in its entirety.


  1. The first spouse to die keeps control of their half of their home and this allows for more certainty surrounding who will inherit at least 50% of the home. Using the example above of passing to children. If Jack dies first, he can be assured that at least his half of the house will go to his children.
  • Half of the property cannot be used for the other spouse’s care fees. If Jill went into a care home, only 50% of the house would constitute part of her estate and therefore the remaining 50% of the house, belonging to Jack, is protected.
  • Should Jill decide to remarry or change her Will after Jack’s death, then her new spouse could only inherit Jill’s 50% and not Jack’s. Therefore, a life interest trust can be helpful in pre-empting any potential inheritance issues surrounding a second marriage. Jill’s new spouse can move into the house but on her death the children will still inherit Jack’s 50% share.


  1. The surviving spouse, Jill, only has the right to live in the house. She does not have access to the capital of Jack’s 50% share. Although this can be an advantage for reasons set out above, it may become a disadvantage depending on the circumstances at the time of the Jack’s death. For example, if Jack and Jill are quite young and Jack dies at a young age, their home may be their only asset. Jill will only be entitled to 50% of the capital or the income produced by the home, if she rents it, for the rest of her life. Depending on Jack and Jill’s wishes this may not be an issue, but it is certainly something to consider given that it could leave the surviving spouse in a financially difficult position.
  • A life interest trust cannot be incorporated into your Will just to reduce your liability to care fees. This is known as ‘deliberate deprivation of assets’. Other justifications such as controlling who inherits and/or pre-empting consequences of a second marriage must also be relevant.
  • You limit the amount of capital available for care fees. Again, this may be an advantage, but if the circumstances are such that Jill needs 100% of the capital from the house for her to go into a better care home, only 50% of the capital is available. Therefore, it can affect the standard of care that the Jill receives due to it affecting which care home she can afford.  
  • There may be tax implications in doing this and you should seek professional advice relative to your own personal circumstances.

If you have any further questions or would like to include a life interest trust in your Will, call our Solihull office on 0121 705 7571 or our Dorridge office on 01564 779 393.

Sophia Kenna
Trainee Solicitor – Wills and Probate Department

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.