In blended families, many people want to ensure their surviving partner can continue living in the family home after their death, while preserving the property for their children or other beneficiaries. The RMB Family & Relationships Law Division explains two options to achieve this:
A life estate or a right of residence are two common options to achieve this goal, but these concepts offer very different rights and obligations.
A life estate grants a beneficiary the right to live in a property for the duration of their life. This is a proprietary interest, meaning it can be registered on the property title. After the life tenant’s death, the property passes to the “remainderperson,” or the person nominated to inherit it.
The life tenant enjoys many of the rights of an owner, such as living in, renting, or selling the property (depending on the Will’s terms). However, the life tenant is responsible for maintaining the property, paying rates, insurance and repairs.
A right of residence is a personal right that allows the beneficiary to live in a property, but it does not confer any ownership interest. Unlike a life estate, the right of residence cannot be registered on the title, and the beneficiary cannot sell, rent, or mortgage the property.
This right is often conditional, meaning it may be revoked if the beneficiary violates certain terms - such as entering a new relationship or failing to maintain the property. The right of residence is typically temporary and ends upon the beneficiary’s death or breach of conditions.
Key Differences:
- Ownership: A life estate provides a proprietary interest in the property, while a right of residence is a personal, non-transferable right.
- Control: Life tenants can rent, sell, or mortgage the property (with conditions), while those with a right of residence cannot.
- Duration: A life estate lasts for the beneficiary’s lifetime, after which the property passes to the remainderperson. A right of residence may be for a limited time or subject to specific conditions.
Choosing between a life estate and a right of residence depends on your goals. If you want your partner to stay in the home for life while ensuring your children inherit it, a life estate is likely the better choice. If you prefer to give your partner temporary or conditional rights, a right of residence may be more suitable.
At RMB Lawyers, we can advise you on the course that best suits your circumstances. Your first step should be to contact our office to arrange a consultation. You can contact us by by phone or our 'Ask a Question' tool on our website.