In helping Mum with her estate planning, someone mentioned a “life interest” in her home. What does that mean?

A life interest is a legal arrangement often used in estate planning that allows someone (often a surviving spouse or partner) to live in a property for the rest of their life, even if ownership is left to someone else, like children from a previous relationship. The person with the life interest can live in the home or receive income from it, but they can’t sell it or leave it to someone else in their own will. Once they pass away, full ownership typically passes to the “remainder beneficiaries.” Life interests can be a useful way to balance competing interests between partners and children, especially in blended families.

However, they can also add complexity and create tension if not well understood or clearly documented. There may also be implications for aged care assessments and Centrelink entitlements. If your family is considering this approach, it’s important to involve an adviser and estate planning solicitor to ensure its structured appropriately.