Understanding Life Interest Trusts Watch

Hannahrae
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I have been doing a bit of reading on 'life interest trusts', and understand they mostly arise when a settlor says ''For A to use in A's lifetime, thereafter for B to use...'' However, I was wondering if the settlor could say ''A, you can use this in MY lifetime, but when I die it must be passed on to B''

Would this still be an example of a life interest trust or do they only apply to the initial beneficiaries' lifetime?
P.S. sorry if I've not explained this well, I can't find any info in my textbook/online
Last edited by Hannahrae; 3 months ago
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Try looking up "interest / trust pur autre vie".
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Hannahrae
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Thanks!
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Bitesizelaw
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It would be unusual, but I don't see why not. You would need to specifiy what would happen to the life intest if the life tenant (A) dies before the settlor. You would also need to ensure that the wording was clear; i.e. that a trust was intended.
(Original post by Hannahrae)
I have been doing a bit of reading on 'life interest trusts', and understand they mostly arise when a settlor says ''For A to use in A's lifetime, thereafter for B to use...'' However, I was wondering if the settlor could say ''A, you can use this in MY lifetime, but when I die it must be passed on to B''

Would this still be an example of a life interest trust or do they only apply to the initial beneficiaries' lifetime?
P.S. sorry if I've not explained this well, I can't find any info in my textbook/online
Last edited by Bitesizelaw; 3 months ago
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(Original post by Bitesizelaw)
It would be unusual, but I don't see why not. You would need to specifiy what would happen to the life intest if the life tenant (A) dies before the settlor. You would also need to ensure that the wording was clear; i.e. that a trust was intended.
Used to happen all the time in the 19th century (and earlier) when it was more common than it is now to grant life interests in property. Often the beneficiary would sell his interest (he not having any need for the property, or having a greater need for cash), and the purchaser would thereby acquire an estate pur autre vie. If the purchaser died before the life then the estate would pass to the purchaser's heirs under the will or under intestacy who got to keep it for the rest of the life of the beneficiary (at least from the early 17th century onwards, somewhat incredibly to modern eyes, the 14th - 16th century rule was that the first occupier got to keep it)

I'm sure it was less common for a settlor to deliberately set out to grant an interest for the life of another but not unheard of.
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