Life Interest Trust Will UK (2026): How It Works, Care Home Fees & When You Need One
Quick answer
A life interest trust will lets a surviving spouse or partner live in the family home for life while ring-fencing your share for your children on their death. It requires you to own the property as tenants in common (not joint tenants), and unlike a discretionary trust, it qualifies for the residence nil-rate band (£175,000 in 2026/27). Most valuable for blended families, second marriages, and care home fee planning — but needs a solicitor to draft correctly.
What is a life interest trust in a will?
A life interest trust — formally known as an immediate post-death interest (IPDI) trust — is a clause you include in your will to control what happens to your share of an asset after you die. It splits the ownership of an asset (most commonly the family home) into two separate interests:
- Life interest: the right to use the property or receive income from it for life, given to the life tenant (usually your spouse, civil partner, or long-term partner).
- Remainder interest: the right to receive the asset outright when the life tenant dies, given to the remaindermen (usually your children or grandchildren).
Your share of the property does not pass outright to your surviving partner. Instead, it is held in trust during their lifetime and passes to your chosen beneficiaries on their death. Your partner cannot sell your share or change who ultimately inherits it.
How a life interest trust works: the key parties
| Role | Who they are | What they get |
|---|---|---|
| Settlor | You (the person writing the will) | Creates the trust by writing it into your will; directs your executor to transfer your share of the property into trust on death |
| Trustees | Named in your will — often children, a solicitor, or a professional trust company | Hold legal title to your share of the property; consent to sales; ensure the life tenant's right is respected; distribute the remainder on death |
| Life tenant | Usually your surviving spouse, civil partner, or partner | Has the right to live in the property (or receive income if it is rented out) for the rest of their life; cannot sell your share without trustee consent |
| Remaindermen | Usually your children or grandchildren | Inherit your share of the property (or its value) outright when the life tenant dies; have a vested interest from the moment the trust is created |
The critical first step: change to tenants in common
Most couples who bought a home together own it as joint tenants. Under joint tenancy, when one owner dies their share automatically passes to the surviving co-owner by right of survivorship — it bypasses your will entirely. A life interest trust clause in your will is therefore completely ineffective unless you first change the ownership structure.
You need to sever the joint tenancy and become tenants in common. As tenants in common, each person owns a defined share (usually 50/50, but it can be any split) that they can leave by will. To sever:
- Complete a notice of severance — a simple written document signed by one or both owners. It does not require the other owner's consent, though it must be served on them.
- Update the Land Registry title — file a Form RX1 (restriction) or Form SEV to record the change. A solicitor can do this as part of drafting the wills.
- Update both partners' wills at the same time to include the life interest trust provisions.
See our full guide to joint tenants vs tenants in common for a detailed comparison.
When a life interest trust will is most valuable
Second marriages and blended families
The most common use case. If you have children from a previous relationship and a new partner, a simple mirror will is risky: if your partner inherits everything and later remarries, your children may get nothing. A life interest trust ensures your partner can stay in the home, but your share passes to your children on their death — not to a new spouse or their family.
Care home fee planning
When you die, your share of the property enters the trust — it no longer forms part of your surviving partner's estate for means-testing purposes. If your partner later needs residential care, the local authority assesses their own assets, not the trust share. This can significantly reduce the care fees they are expected to pay. Important caveat: deliberate deprivation rules mean the trust must be created for genuine planning reasons, not solely to avoid care fees.
Protecting children's inheritance from remarriage
Without a life interest trust, a surviving spouse who remarries has their existing will automatically revoked by the new marriage (unless made 'in contemplation of marriage'). A life interest trust removes your share from their estate entirely — so even if they remarry and make a new will, they cannot redirect your share to their new partner.
Cohabiting couples with children
Cohabiting partners have no automatic inheritance rights in England and Wales — they must be named in a will. A life interest trust ensures your partner can remain in the home while protecting your children's long-term inheritance. Especially important if the property is in your sole name.
Protecting a vulnerable life tenant
If your surviving spouse has early-stage dementia, a spending problem, or is subject to undue influence from others, holding your share in trust (rather than leaving it outright) provides a layer of protection — trustees must agree to any disposal of the trust share.
Life interest trust vs discretionary trust: key differences
Both are types of will trust, but they work very differently. The choice matters for inheritance tax and the life tenant's security.
| Feature | Life interest trust (IPDI) | Discretionary trust |
|---|---|---|
| Life tenant's right | Fixed — guaranteed right to occupy or receive income | None fixed — trustees decide who benefits and when |
| Residence nil-rate band (RNRB) | Yes — qualifies (up to £175,000 in 2026/27) | No — RNRB is lost if home goes into discretionary trust |
| IHT treatment | Trust assets form part of life tenant's estate on death (but NRB used on first death) | Separate IHT regime: 10-year periodic charge (up to 6%) + exit charges |
| 10-year periodic IHT charge | No | Yes — up to 6% of trust value every 10 years |
| Flexibility | Less flexible — life tenant's right is fixed | More flexible — trustees can adapt distributions over time |
| Best use case | Spouse / partner in family home with children from prior relationship | Vulnerable beneficiaries, complex multi-generation planning |
| Administration burden | Low — minimal ongoing trust accounts | Higher — annual trust accounts, periodic charge calculations |
Inheritance tax: how a life interest trust is taxed in 2026
The IHT treatment of an IPDI (immediate post-death interest trust) is more favourable than a discretionary trust for most families:
On your death (trust created)
Your estate pays IHT in the normal way using your nil-rate band (£325,000) and any available residence nil-rate band (£175,000 in 2026/27). A life interest trust in your will qualifies for the RNRB — unlike a discretionary trust — because the life tenant has an immediate right to the property and it passes to direct descendants on their death. Transfers between spouses on death are still exempt from IHT.
During the life tenant's lifetime
No IHT periodic charges. The trust assets are treated as part of the life tenant's estate throughout their lifetime (not as a separate trust estate), so there is no 10-year charge and no exit charge on distributions — a significant advantage over a discretionary trust.
On the life tenant's death
The trust assets form part of the life tenant's estate for IHT purposes on their death. The remaindermen receive the trust share, but it is taxed as part of the life tenant's estate at 40% on the excess above their own nil-rate band and any available RNRB. If the life tenant is a spouse, their transferable nil-rate band includes your unused allowance from first death — potentially £650,000 nil-rate band and £350,000 RNRB combined in 2026/27.
2026 IHT changes and life interest trusts
From April 2026, pension death benefits are being brought into the IHT estate for the first time. This increases the importance of using all available nil-rate band efficiently. Life interest trusts help by splitting the nil-rate band usage across two deaths rather than concentrating it on the second death — a valuable planning tool for estates that now include pension funds.
Can the surviving partner sell the house?
A common concern: what if the life tenant needs to downsize or move into care? The answer depends on the trustee powers written into the will:
- Sale with trustees' consent: most life interest trust wills give trustees the power to sell the property with the life tenant's agreement and reinvest the trust's share in a substitute property or cash investment. The life tenant retains their right to the income or continued occupation.
- Overreaching: if the trustees (there must be at least two, or a trust corporation) join in the sale, the buyer takes the property free of the trust. The trust attaches to the sale proceeds instead.
- No unilateral sale: the life tenant cannot sell the whole property alone and keep your share — they only own their own half outright.
Your will should expressly grant trustees the power to sell, buy a replacement property, and invest trust funds — this is standard in professionally drafted life interest trust wills.
Do you need a solicitor for a life interest trust will?
Yes — for most people. Life interest trust wills are more complex than standard wills for several reasons:
- You need to sever the joint tenancy and update the Land Registry before or at the same time as making the will.
- The trust provisions must correctly define trustee powers, the life tenant's rights, and what happens in various scenarios (sale, life tenant entering care, life tenant remarrying).
- The IHT interaction with the RNRB and transferable nil-rate band needs careful drafting to preserve maximum reliefs.
- Both partners usually need to make new wills simultaneously to avoid contradictions.
WillSafe UK's DIY will kits are designed for straightforward estates — a single person, a couple leaving everything to each other then children, with no trust provisions required. If a life interest trust is appropriate for your situation, we recommend a specialist wills solicitor or chartered estate planner. Typical cost: £350–£800+ per will pair, including the tenancy severance.
If your situation is straightforward — you are in a first marriage with no children from a prior relationship and no significant care fee concern — a mirror wills kit (£69.99) leaving everything to your spouse then equally to your children will achieve your goals more simply and at far lower cost.
Life interest trust checklist: is it right for you?
| Your situation | Life interest trust useful? |
|---|---|
| First marriage, children are joint children of both partners | Probably not — mirror wills usually sufficient |
| Second marriage or long-term relationship, children from prior relationship | Yes — core use case |
| Cohabiting couple, property in one partner's name | Yes — protects partner while preserving children's inheritance |
| Concern about care home fees eroding estate | Yes — partial protection for trust share |
| Simple estate, no blended family, no care home concern | No — adds unnecessary complexity |
| Estate over £500,000, pension now included in IHT from 2026 | Consider with specialist advice — nil-rate band splitting valuable |
Frequently asked questions
What is a life interest trust in a will?▼
A life interest trust (also called an immediate post-death interest trust or IPDI) is a clause in your will that places your share of an asset — usually the family home — into a trust on your death. Your chosen life tenant (typically your spouse or civil partner) has the right to live in the property or receive income from it for the rest of their life. When the life tenant dies, your share passes to your chosen remaindermen — usually your children or grandchildren.
How does a life interest trust protect against care home fees?▼
When you die, your share of the property passes into the trust — it no longer belongs to your surviving spouse outright. Because they do not own your half, it is not automatically included in their estate for a local authority means test if they later need residential care. However, this protection is not absolute: local authorities can investigate deliberate deprivation of assets, and the surviving spouse's own half of the property will still be means-tested. The trust needs to be created for genuine estate planning reasons, not purely to avoid care fees.
Do I need to change to tenants in common before making a life interest trust will?▼
Yes — and this is critical. If you own your home as joint tenants, the right of survivorship means your half automatically passes to your co-owner on death, bypassing your will entirely. A life interest trust in your will only works for your share of the property if you first change the ownership to tenants in common — where each person owns a defined 50% share that can be left by will. You change this with a simple notice of severance and updating the Land Registry title.
Is a life interest trust the same as a discretionary trust?▼
No — they are different types of trust with different tax treatment. In a life interest trust, the life tenant has a fixed right to use the property or receive the income. In a discretionary trust, no beneficiary has a fixed entitlement — trustees decide who benefits and when. A key practical difference: a life interest trust (IPDI) qualifies for the residence nil-rate band (RNRB), so your estate can still claim up to £175,000 of IHT relief in 2026/27. A discretionary trust does not qualify for the RNRB.
Can a surviving spouse sell the property if it is in a life interest trust?▼
The life tenant cannot unilaterally sell the property and pocket the whole proceeds, because they only own their own half outright — your half is held in trust. However, in practice the trustees and life tenant can agree to sell the property and reinvest the trust's share in a new property or place it in a trust fund that continues to pay the life tenant income. This is common when the surviving spouse wants to downsize. Your will should include trustee powers to sell and reinvest.
What happens to the life interest trust when the life tenant dies?▼
On the life tenant's death, the trust ends and your share of the property — or whatever the trust holds at that point — passes outright to the remaindermen named in your will (typically your children or grandchildren). The life tenant's own half of the estate is dealt with by their will separately. The remaindermen's inheritance is treated for IHT purposes as part of your estate (the original settlor's estate), not the life tenant's — which is why the RNRB can apply.
How much does a life interest trust will cost?▼
A will containing a life interest trust is more complex than a standard will and typically costs £350–£800+ via a solicitor. You will also need to sever the joint tenancy (a simple document, often included by solicitors or done via a Land Registry Form SEV for a small fee). Ongoing costs are low — a life interest trust has minimal annual administration compared to a discretionary trust. WillSafe UK's DIY will kits are designed for straightforward estates; if a life interest trust is appropriate for your situation, specialist legal advice is recommended.
Does a life interest trust will affect inheritance tax?▼
A life interest trust (IPDI) is treated as part of the life tenant's estate for IHT purposes — not as a separate trust estate. This means: (1) your nil-rate band is used when the trust is set up on your death; (2) the property in trust forms part of the life tenant's estate on their death, but your nil-rate band was already used; (3) crucially, the residence nil-rate band (£175,000 in 2026/27) still applies because an IPDI qualifies as a direct descendant's interest. This makes a life interest trust significantly more tax-efficient than a discretionary trust for most family homes.
Start with a clear, legally valid will
For most couples in a first marriage with shared children, a mirror will covers everything you need — no trust required. Write yours today with our plain-English will kit.
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This article is for general information only and does not constitute legal or tax advice. Life interest trust wills involve complex property law and IHT rules — always take specialist advice before including trust provisions in your will. WillSafe UK's DIY will kits do not include life interest trust provisions. WillSafe UK is not a firm of solicitors. Last reviewed 13 May 2026.