An interest in possession is a type of 'fixed interest' trust; the beneficiary has a specific interest (not simply a mere hope of benefitting). In this case, the income beneficiary (often called the 'life tenant') has a right to the income for a specified time; either until a trigger point (marriage or a certain age) or until death. Where the life tenant has a right to the income until death, this is often called a 'life interest trust'.
Life interest trusts are often used to protect family assets. For example, a testator (the person making the will) has remarried and wants to ensure that his children (from his first relationship) receive his capital assets. However, he also wants his new wife to be financially comfortable after his death. Rather than leave the assets outright
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Web page updated on 17 Mar 2025 13:16