What does a “life interest” mean when applied to a cottage deed?
It generally means that the named person has all the rights to the use of the property and to any income generated by the property for the entire time they are living. The life interest can’t be willed or transferred, and upon death full ownership and all rights of use goes to those who hold the “remainder interest.”
Life interests are most often used by parents who want to pass the cottage on to their children for tax purposes while still retaining control of the property during their lifetimes. With a life interest, the kids can’t sell or mortgage without their folks’ permission. The potentially awkward part of this situation? Legally, you’d no longer have any right to use the cottage if your life interest holder decided to prevent you from doing so.