Legal Definitions - liferent

In Scots law, a liferent is a legal right that allows an individual to use and enjoy someone else's property for the duration of their own lifetime, without actually owning the property itself or being able to destroy or sell its fundamental substance.

Essentially, the person holding the liferent (the "liferenter") has the benefit of the property, such as living in a house or receiving income from an asset, but they must preserve the property so that it can eventually pass to the true owner (known as the "fiar") in substantially the same condition.

Here are some examples to illustrate this concept:

• Example 1: Inheritance of a Family Home

  Imagine a will where a husband leaves his house to his children, but grants his surviving wife a liferent over the property. This means the wife has the right to live in the house and enjoy it for the rest of her life. She can maintain it, decorate it, and use all its facilities. However, she cannot sell the house, mortgage it, or make significant structural alterations that would diminish its value or substance. Upon her death, the liferent ends, and the children, as the true owners (the fiars), gain full and unrestricted ownership of the house.

• Example 2: Income from an Investment Portfolio

  A wealthy individual establishes a trust that holds a portfolio of income-generating investments, such as rental properties and dividend-paying stocks. The trust deed specifies that their niece is to receive a liferent over this portfolio. This arrangement allows the niece to receive all the income generated by these investments (rent, dividends) for the rest of her life. She benefits financially from the portfolio, but she does not own the underlying assets themselves. She cannot sell the properties or the stocks, nor can she make decisions that would deplete the capital of the portfolio. After her death, the capital assets of the portfolio would pass to the designated ultimate beneficiaries, such as a charity or other family members.

• Example 3: Enjoyment of a Valuable Art Collection

  A renowned art collector bequeaths their extensive and valuable art collection to a national museum. However, out of affection for a long-time friend who also appreciates art, the collector grants the friend a liferent over a specific portion of the collection. This means the friend can display these artworks in their home, enjoy them, and even lend them to reputable galleries for temporary exhibitions (with the museum's consent, ensuring their preservation). The friend cannot, however, sell any of the pieces, damage them, or make permanent alterations. For their lifetime, they have the privilege of living with and appreciating the art. Once the friend passes away, the liferent ceases, and the specified artworks become fully and solely the property of the national museum.