Life Interest Trust


(martyn.dixon) #1

I am dealing with the administration of someone’s estate. The deceased’s stepson died first and, under the terms of his Will, gave his step-mother a right to occupy. The terms of his Will stated:

PROVIDED ALWAYS that I DIRECT there shall be no sale of my share of my property and contents known as the Property for as long as the same shall be required by X as her home subject to the said X paying the buildings and contents insurance in respect thereof and paying all the other outgoings whatsoever in respect of it as long as she shall desire to live therein and that if the said X shall desire to sell and purchase another property in which she shall live as her home then my trustees shall allow the same to take place and in such case any balance not so used shall fall into Residue

She died whilst living in the property. Am I correct in thinking that the stepson’s interest in the proper amalgamates with the deceased’s estate, as she had the right to leave in the property?

Any guidance would be greatly appreciated.

Martyn Dixon
Harold Bell Infields & Co


(Paul Saunders) #2

The step-mother has an interest in possession in the property, the existence of a trust being reinforced by the power given to the trustees to reinvest the proceeds of sale of the Property in another property for the step-mother’s occupation.

Whether or not the step son died after 21 March 2006, s.52 IHTA 1984 will apply so that the value of the Property aggregates with the step-mother’s own estate for IHT purposes.

Whilst not entirely clear from the question, I take that the “someone” is the step-mother.

Paul Saunders


(martyn.dixon) #3

Thank your for your response. Yes, you are correct, it is the step-mother’s estate.

The step-son did die post-2006.

Martyn Dixon
Harold Bell & Co