Find out what a life interest in land is. How it can be applied, how it works, and more.
If you are around property transactions, you become familiar with the idea of a registered lease, mortgage or an easement. But a life interest is a less commonly seen Property Law encumbrance sitting on a property title. What are they?
A life interest most commonly comes about when someone leaves everything in their Legal Will to their kids, on the condition that their spouse has the right to reside in the matrimonial home until they also pass away. That right to reside on the estate, is the life interest. It is also sometimes called a ‘life estate’.
A life interest effectively prevents the property being sold or otherwise dealt with, until the life interest is extinguished by the estate holder’s death.
If a life interest is granted to someone, it is registered on the estate property title (like a lease, easement or mortgage is), and will remain there until the Titles Office is notified that that person has passed away. This is done by lodging the death certificate at the Titles Office.
Under Property Law, a life interest can also be registered, say, at the same time as parties are doing a granny flat agreement. Say your parents build a granny flat on your property, one way to protect them would be to register a life interest. That would mean that whatever happens between you and your spouse (and with the property), your parents can live in their granny flat on the estate until they pass away. There are, of course, many implications with registering a life interest on your property title. For example, it can affect your ability to refinance or to sell.
Properly protecting people in your Will, or protecting people who sell their property to move into a granny flat with family, is important. But there are many ways to do it under Property Law, and each way has different implications. The Butler McDermott law firm’s will solicitors in Sunshine Coast can assist you in all these matters. Feel free to give our Nambour wills and estates lawyers a call.