Life interests vs rights of residence
Both protect a surviving partner. They work differently and produce different outcomes.
A life interest gives the recipient a broader bundle of rights over a property or asset for life – including potentially income from it. A right of residence is narrower, covering specifically the right to live in a property. For most blended-family situations, a right of residence is what people actually need.
Life interest scope
A life interest in property typically gives the recipient: the right to live in it; the right to rent it out and keep the income; obligations around maintenance and outgoings. Life interests can also apply to investment portfolios (income to the life tenant, capital preserved).
Right of residence scope
A right of residence is just that – the right to live in a specified property. No right to rent it out, no income entitlement. Narrower, simpler, and usually exactly what blended families want.
Tax differences
Life interests can have CGT implications when they end (the asset passes from the life tenant to the remainderman). Rights of residence are generally simpler from a CGT perspective. Sam coordinates with your accountant on the right structure.
Choice depends on intent
Want the partner to be able to rent out the property and live elsewhere on the income? Life interest. Want the partner just to be able to stay in the family home? Right of residence. Most blended-family scenarios use the latter.
Summary
Both protect a surviving partner. They work differently and produce different outcomes.
Talk to Sam about your situation
If this article raised questions for your own circumstances, Sam Michele offers free 20-minute initial consultations. Learn more about our rights of residence drafting, or book a consultation.
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Disclaimer: This article is general information only and does not constitute legal advice. Estate planning is deeply personal - every family's circumstances are different. For advice specific to your situation, please contact Rosewood Succession Solicitors.