Life interest created in Financial Consent Order on divorce

Our client was granted a “life interest” in the former matrimonial home on divorce via a clause in the Financial Consent Order, however, this is simply a right to occupy based on the wording as there is no right to income/capital. Their former spouse is still the legal owner and is now selling the property to another tenant in the same building and everyone involved in the purchase/sale is in agreement to our client keeping her “life interest”, i.e. happy for her to remain in the property for the remainder of her life. However, there is currently no restriction in respect of her interest on the property title so I am seeking advice on how best for our client to protect her life interest going forward now that the purchase/sale is underway?

Hi Anna

I must confess I am confused as to how someone can have a life interest in an asset no longer owned by the trust. Surely the new owner would become an settlor by granting someone a tenancy for life, with the consequences that brings.

Also, why would someone buy a flat and let someone live there rent free. After all, if she paid rent it would just came back to her if she has a life interest in the property/ the income it produces. Or is the former spouse paying rent to the purchaser so the current occupant can stay there?

I realise this is not an answer to your question, but wonder if perhaps we need to understand the situation better in order to comment.


I suggest the way forward is for the sale to be made subject to the existing occupation rights - i.e. the client’s right of occupation - which will no doubt affect the price on sale . The contract will need to make clear the basis of that right so that it is suitably protected.

In such an arrangement, I do not believe the purchaser will be the settlor – that role will remain with the former spouse(?).

The client will have a contractual right of occupation and, whilst it will not be a tenancy, I suspect the purchaser will need to comply with the same statutory obligations as apply between a landlord and tenant (but they may want to take their own advice on this).

The situation is sufficiently unusual, it may be in the client’s best interests for counsel to opine on what needs to be included in the contract in order to secure the client’s rights.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

I’m not attempting to answer your question, but I wonder whether the “trust” has been registered for TRS, or as it was created following a court order, it may be exempt.

Patrick Moroney