Leaving a Life Interest in your home

Short answer: A Life Interest is a gift of an asset (usually a house) to a Beneficiary (often a surviving wife or husband), who then has the right to use that asset until they themselves die. It remains part of your Estate, and passes to the Beneficiaries you choose when the Life Interest ends.

Why people use a Life Interest

It is popular with blended families and retirees. It lets you secure a home for your partner while making sure the property eventually goes to your children or other chosen Beneficiaries.

Advantages

• Your partner has secure housing for life.
• Your children's eventual inheritance is protected.
• It can reduce the risk of conflict between a partner and children from an earlier relationship.

Disadvantages and things to think about

• The person with the Life Interest cannot usually sell the house and keep the proceeds.
• Questions can arise about who pays rates, insurance and repairs.
• If the person moves out, for example into aged care, the arrangement needs to say what happens next.
• It can delay your other Beneficiaries' inheritance for many years.

How RapidWills handles it

The RapidWills online wizard gives you the option to provide a Life Interest to a nominated Beneficiary with respect to a specific property. Your Will sets out the terms, including the events that bring the Life Interest to an end. RapidWills does not provide advice in respect of that gift or any other gift. If you intend to give a Life Interest and are unsure of its consequences, you should seek qualified legal advice first.

Remember

The property must be owned in your own name to be gifted in your Will. A home held as joint tenants passes automatically to the surviving owner.