Information about Interest In Possession Trust

The Law of Wills, Trusts and Inheritance
Part of the common law series
Wills
Wills  · Holographic will
Joint wills and mutual wills  · Will contract
Codicils
Parts of a Will
Attestation clause  · Residuary clause
Incorporation by reference
Contesting a Will
Testamentary capacity  · Undue influence
Insane delusion  · Fraud
Problems of property disposition
Lapse and anti-lapse
Ademption  · Abatement
Acts of independent significance
Elective share  · Pretermitted heir
Trusts
The Law of Trusts
Generic Terms:
Express trust  · Constructive trust
Resulting trust
Common Types of Trust:
Bare trust  · Discretionary trust
Accumulation and Maintenance trust
Interest in Possession trust
Charitable trust  · Purpose trust
Incentive trust
Other Specific Types of Trust:
Protective trust  · Spendthrift trust
Life insurance trust  · Remainder trust
Life interest trust  · Reversionary interest trust
Honorary trust  · Asset-protection trust
Special needs trust: (general)/(U.S.)
Doctrines governing trusts
Pour-over will  · Cy-prs doctrine
Other related topics
Living Wills (advance directives)
Inheritance
Intestacy  · Testator  · Probate
Power of appointment
Simultaneous death  · Slayer rule
Disclaimer of interest
Other areas of the Common Law
Contract law  · Tort law  · Property law
Criminal law  · Evidence

An interest in possession trust is the most common example of a life interest trust.

An interest in possession is a "present right to the present enjoyment of something"^[1]. A beneficiary of a trust with an interest in possession will have the right to receive all the income from the trust, minus tax and trustees' expenses, for a fixed period or, more usually, for the rest of the beneficiary's life.

The interest in possession ends when the beneficiary, also called the life tenant, dies. The capital of the trust will then pass to another named beneficiary.

Interest in possession trusts are often created as part of a will. Typically, a surviving spouse will be granted a right to the income of the trust by the settlor. When the surviving spouse dies, the rest of the fund (the remainder) may pass to the couple's children or other named persons.

References