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A life interest trust is one of the most common trust structures found in UK wills, particularly in second marriages or where a testator wants to provide for a surviving spouse whilst ultimately preserving the estate for their children. Understanding what a life interest trust means for you as executor — and where your duties end and the trustees' duties begin — is essential to administering the estate correctly. For a broader overview of your role, see our guide on executor first steps and our complete UK probate guide.
A life interest trust (also called an "interest in possession" trust) splits beneficial ownership of an asset between two groups of people across time:
The trust is created by the will itself. From the moment the testator dies, the trust comes into existence and the trustees hold the assets for the benefit of the life tenant and remaindermen in accordance with the trust's terms.
The classic life interest trust in a UK will works like this:
Example
Alan dies leaving a will that says: "I give my share of the matrimonial home to my trustees to hold on trust, giving my wife Barbara the right to live there for the rest of her life, and on her death to pass to my children equally."
Barbara is the life tenant. She can live in the property rent-free. She is also responsible for paying outgoings such as repairs, insurance, and council tax. Alan's children are the remaindermen — they inherit Alan's share when Barbara dies.
This arrangement is popular because it achieves two goals simultaneously: the surviving spouse is protected and has a home for life; the testator's children from a previous relationship (or any relationship) are guaranteed to inherit eventually.
Life interest trusts can also apply to investment portfolios, savings accounts, or the residuary estate — not just property. They are particularly common where the testator wants a second spouse to benefit during their lifetime whilst ensuring the capital ultimately passes to children from a first marriage.
Your first job is to read the will carefully and identify precisely which assets are subject to the life interest trust. The will may specify:
Assets that are not covered by the life interest trust pass directly to the named beneficiaries or fall into residue in the normal way. It is possible — and common — for a will to contain both a life interest trust and outright gifts. See our guide on what the residuary estate means if the trust is over the residue.
You should also check whether the will contains any codicils that amend the trust provisions.
This is one of the most frequently misunderstood aspects of life interest trusts. Your duties as executor and as trustee are distinct, even if the same people hold both roles.
| Executor role | Trustee role |
|---|---|
| Winds up the deceased's estate | Manages the trust indefinitely |
| Pays debts, taxes, and legacies | Collects income and pays it to the life tenant |
| Obtains the Grant of Probate and collects assets | Invests and manages the trust capital prudently |
| Transfers trust assets to the trustees to hold | Maintains trust accounts and files trust tax returns |
| Finishes when the estate is fully administered | Continues until the life tenant dies (or trust ends) |
In practice, the will often names the same people as both executors and trustees. Once you have administered the estate and transferred the trust assets across, your executor duties cease and your trustee duties begin. For a full breakdown of your ongoing executor responsibilities, see our guide to executor personal liability in the UK.
You cannot formally transfer assets to the trust until you hold the Grant of Probate. Apply using form PA1P, value the estate (including the trust assets), and complete the relevant IHT return. See our detailed PA1P guide and our IHT400 guide.
If the life interest trust includes a residential property, you must update the Land Registry title to reflect the trust. This involves:
For valuation matters, refer to our guide on valuing property for probate.
Investment portfolios, stocks, and shares held in the deceased's sole name must be transferred to a trustee account. Contact the relevant investment platform or stockbroker and provide the Grant of Probate. A new account will usually be opened in the trustees' names "as trustees of the [name] Will Trust".
Trustees need a separate bank account to receive and pay out trust income. This should be clearly labelled as a trustee account. Do not mix trust funds with your own personal money or the general estate administration account.
The will itself creates the trust and sets out its terms. However, it is sometimes helpful for the trustees to sign a separate declaration of trust confirming they hold the assets on the trusts set out in the will. A solicitor can prepare this document. It provides a clear record for the life tenant, remaindermen, and any future professional advisers.
The IHT position depends on who the life tenant is and the nature of the trust assets.
Where the life tenant is the deceased's spouse or civil partner, the assets passing into the life interest trust are fully exempt from IHT at the first death — provided the spouse/civil partner is UK-domiciled. This is the spousal exemption. No IHT is due on the trust assets when the first spouse dies, regardless of value.
The RNRB (currently £175,000 per person) is available where a "qualifying residential interest" passes to direct descendants (children, grandchildren, etc.). A life interest trust over the matrimonial home can qualify for the RNRB provided:
This means the RNRB is "banked" at the first death, to be used at the second death. The combined couple can therefore shelter up to £1 million from IHT (two nil-rate bands of £325,000 plus two RNRBs of £175,000). See our IHT400 guide for how to claim the RNRB correctly.
If the life tenant is someone other than the deceased's spouse or civil partner (for example, a parent creating a life interest in favour of a sibling), the spousal exemption does not apply. The value of the trust assets forms part of the taxable estate and IHT may be due at the first death in the usual way.
When the life tenant dies, the trust assets pass to the remaindermen. This is a taxable event for IHT purposes. The trust assets are treated as part of the life tenant's estate for IHT (as they had an interest in possession). The trustees must:
At this point the surviving spouse's own nil-rate band and RNRB will be available, plus any unused portions transferred from the first spouse's estate. This can significantly reduce or eliminate the IHT liability. See our guide on what to do after the Grant of Probate.
Once the trust is constituted, the trustees have continuing obligations:
The interests of the life tenant and the remaindermen can sometimes conflict. Common sources of dispute include:
Trustees must act impartially between the life tenant and the remaindermen. If serious disputes arise, or if the trust terms are unclear, seek specialist legal advice promptly. See our guide on contentious probate for related disputes.
Consider instructing a solicitor if:
For a broader view of your responsibilities and exposure, see our guide to executor personal liability and the full executor timeline.
Yes, but only with the consent of the trustees. The proceeds of sale must then be held on the same trusts — the life tenant is entitled to the income generated by the proceeds (or to live in a replacement property if the trust terms allow), and the capital passes to the remaindermen when the life tenant dies.
The default position is that the life interest continues regardless of remarriage unless the will expressly provides otherwise. Some wills include a clause terminating the life interest on remarriage. Check the will carefully. If the life interest continues and the trust property is a residential property, the IHT implications on the life tenant's death will need careful analysis.
Yes. Since September 2022, most UK express trusts (including life interest trusts arising under a will) must be registered on HMRC's Trust Registration Service (TRS) within 90 days of being created. Penalties can apply for late registration. An accountant or solicitor can assist with TRS registration.
No. A floating trust (also associated with mutual wills) is a different concept — it applies where two testators agree not to change their wills after the first death. A life interest trust is a straightforward interest in possession created in a single will. The two concepts are entirely distinct.
Yes, in many cases. If the life tenant and all the remaindermen agree (and are all adults with legal capacity), they can enter into a deed of variation within two years of the death to redirect the assets outright to the remaindermen, effectively collapsing the trust. This can simplify administration and — depending on the circumstances — may also have IHT advantages.
A plain-English guide for UK executors on how to read and understand a will — covering structure, key legal terms, identifying executors and beneficiaries, and red flags that need professional advice.
Named as executor in a will? Learn your first 10 steps: registering the death, locating the will, valuing the estate, and applying for probate. UK 2026 guide.
Complete guide to filing IHT400 with HMRC: who needs to file, schedules required, step-by-step walkthrough, and common mistakes. IHT205 abolished from 2024.
How to get a probate property valuation in the UK: RICS Red Book surveyor, estate agent letters, and HMRC's accepted methods. Avoid underpayment penalties. 2026 guide.
A deed of variation allows beneficiaries to redirect a gift within 2 years of death for IHT and CGT purposes. Understand the rules, HMRC notification, and uses. UK 2026.
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