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Life interests

What information is included in a typical Will.

Life interests in a Will permit the use of a particular asset, such as real estate, for the remainder of a beneficiary’s life. Life interests can also include the interest stream that accrues from an asset, such as shares.

After the beneficiary's death, the asset passes to another beneficiary or beneficiaries. These beneficiaries are called remaindermen.

Life interests are often made if the Will-maker has remarried, giving a second spouse the use of property for their lifetime before the asset passes to the children from the first marriage.

There are several different types of life interests. They are treated differently according to the particular wording in the Will clause. Therefore care must be taken in the construction of a life interest clause so that no unintended consequences occur. A lawyer should assist with the Will if it involves a life interest.

Conditions may be attached

The life interest may be conditional on the intended beneficiary doing or refraining from doing something. For example, the life interest may transfer to remaindermen if life interest beneficiary remarries.

What could go wrong?

The Settled Land Act 1958 (Vic) must govern the life interest if property is held on trust for the benefit of a person until their death. This Act empowers a life tenant to sell the property (substitute it with another asset), whereas the trustees of the estate do not have this power.

This is often not foreseen by the Will-maker, who may have intended that their children eventually keep the family home.

A way to avoid the application of the Act is to use a Will clause that instructs the trustees to sell property immediately, but gives them the power (at their complete discretion) to postpone the sale.

The Will then directs the trustees to postpone that sale to allow a particular beneficiary to reside in that property, subject to conditions that are stated in the Will—such as responsibility for insurance, general maintenance and payment of rates. This excludes the operation of Settled land Act and the life interest beneficiary does not have power to sell the property.

See Part 1, Div 3—Settled Land Act 1958 (Vic).

Who pays for property maintenance?

The Will-maker should also decide and clearly state if it is their intention that person granted the life interest is to be held responsible for maintaining the property. This includes paying rates, taxes, insurance and other expenses necessary for keeping the property in good repair. Alternately this may need to come from the estate.

Impact of inflation

The Will-maker needs to consider the effect of inflation when leaving a life interest. The amount left at time of making a Will may be hopelessly inadequate at the time of death. For example, if a life interest is given to someone they may also need some money to make sure that they can afford to properly maintain the property unless the Will specifies that these expenses are to come out of the estate.

More information


Administration and Probate Act 1958 (Vic)

  • Part 1—general
  • Part 2—especially Div 3—devolution of real estate

See Administration and Probate Act 1958 (Vic).

Trustee Act 1958 (Vic)

  • s. 70—application of the Act to settled land trustees

See Trustee Act 1958 (Vic).

Settled Land Act 1958 (Vic)

  • Part 1, Div 3—tenants for life and persons with powers of tenants for life

See Settled Land Act 1958 (Vic).


Fitzroy Law Handbook

Fitzroy Legal Service’s Law Handbook has information about Wills.

See Wills