Interest in Possession Trusts
Balancing Financial Security With Asset Protection
An Interest in Possession (IIP) trust — often called a life interest trust — is one of the most useful tools in estate planning for families who need to look after two interests at once. It lets you give one beneficiary the right to income, or to live in a property, for their lifetime, while ensuring the underlying assets ultimately pass to the heirs you've chosen.
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It's a structure built for a very common and very human situation: wanting to provide for someone now, without giving away the capital that's meant for someone else later.
What is an Interest in Possession Trust?
The defining feature of an IIP trust is that it separates the right to income from the right to capital. Three roles make it work:
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The Life Tenant — the beneficiary with the "interest in possession." They're entitled either to all the income the trust generates (such as dividends or rent), or to live rent-free in a property the trust owns, for their lifetime.
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The Remaindermen — the ultimate beneficiaries, who inherit the trust's capital once the life tenant's interest ends, usually on their death.
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The Trustees — the legal owners of the assets, responsible for managing them and fairly balancing the needs of the life tenant and the remaindermen.
Why Use an Interest in Possession Trust?
Providing for a vulnerable family member is one of the most important things any estate plan can do, and it rewards careful, early planning: choosing the right type of trust, appointing the right trustees, and ensuring the will is drafted so the protection is built in from day one. We help families approach this calmly and thoroughly, coordinating where helpful with carers and other advisers so the arrangement genuinely works in practice.
Getting It Right, In Good Time
Providing for a vulnerable family member is one of the most important things any estate plan can do, and it rewards careful, early planning: choosing the right type of trust, appointing the right trustees, and ensuring the will is drafted so the protection is built in from day one. We help families approach this calmly and thoroughly, coordinating where helpful with carers and other advisers so the arrangement genuinely works in practice.