Life Tenants, Remaindermen, Settled Estates and Insurance

Legal terminology can often be confusing. That’s why we’ve created this handy guide to the meanings of the terms life tenant, remainderman and settled estate. This article also touches on the requirement to have insurance on property for life tenants and remaindermen.


A trustee and a settled estate

A trustee is a person or firm that holds and administers property for the benefit of a third party. A trustee has a duty to act in the best interests of the trust beneficiaries.

A settled estate is an estate of a deceased person that has gone through the full process of administration and distribution of debts and assets.


A Life Tenant

A life tenant is someone who has all rights associated with ownership of property, except the right to sell property. Upon the death of the life tenant, the property reverts back to the owner, or to a third party designated by the owner.

There are two types of life tenants, legal and equitable. A legal life tenant is entitled to the possession of the property. An equitable life tenant has a more complex situation. They are not entitled to the possession of the property if the trustee has an active role in maintaining the property and collecting rent, unless the instrument which creates the life tenancy confers a right to possession on the equitable life tenant.


A Remainderman

A remainderman is the person who inherits or is entitled to inherit property upon the death of the life tenant or termination of the life tenancy.



It is optional for legal life tenants and remainderman to insure their property. Equitable life tenants have the option to insure, unless it is a condition of their estate that they do so. A life tenant is entitled to the proceeds of insurance on their interest.

Where there is no obligation on the life tenant to insure, trustees of settled estates likely have a duty to insure the property if funds are available. This power is granted under section 41 of the Trustee Act 1925 (NSW), and elaborated upon in the case of Pateman v Heyen. This case stated the trustee has a duty to exercise such care and skill as a man of ordinary prudence would exercise and is liable for loss resulting from failure to comply with this standard. It is likely the exercise of care and skill involves acquiring insurance for the trust property.

To avoid problems, wills and settlements should clearly state insurance obligations. It is strongly advised trustees of property occupied by life tenants insure the property.


If you would like advice from our experienced lawyers about wills, estates and property, contact us today.


DISCLAIMER: The information contained in this article is general and is not intended to be advice on any matter. It is for information only and is not legal advice. In the event of a legal problem, you should seek legal advice.

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