This is also known as a life interest. Someone having a life estate has a right to use the asset in which he has in a life estate for his lifetime. The right can also exist for the lifetime of somebody else. The right extends to use of the asset and the income derived from it. However, this right does not include consuming the asset.

These concepts first arose in resgard to land. The holder of the life estate, known as a life tenant, could farm the land, sell the crops and keep the proceeds. The life tenant could also reside in any house located on the property. However, the life tenant could not directly sell the property. Today, this concept is usually applied to financial assets. The life tenant has the right to the income, but not principal. For sensible reasons, assets that are to be used by a beneficiary for life are, in most cases, placed into a trust so that a trustee will have control over them with power in enforcing the terms of the life tenancy.

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