Article by Manny Wood published in the Coffs Coast News Of The Area on 20 October 2023.
Jack and Jill, in their early 30s, have two young children and were recently married.
They have worked hard to pay-off half of their mortgage and they have already accumulated a reasonable amount of superannuation.
Jack is concerned that if he were to pass-away unexpectedly, whilst still being relatively young, it is likely that Jill would enter-into another relationship and that her new partner could “end up with everything” and that his children could miss-out on their inheritance.
Jack seeks legal advice and is advised that it is possible for him to execute a more complex will that would grant Jill a life interest in their home whilst preserving “his half” of the equity for his children.
Jill’s right to occupy the home would be conditional upon her paying the rates and insurance and keeping the home in reasonable repair.
The life interest could be a “flexible” one, whereby Jill would be entitled to relocate under the same arrangement.
Jack is advised that he should appoint an independent executor to monitor Jill’s compliance with the conditions of occupation and to facilitate her relocation, if need be.
Jack’s executor would also potentially hold his children’s inheritance on trust until they attain the age of majority.
Jack is aware that his superannuation and the attached life insurance policy, would provide sufficient funds to pay-out the mortgage.
The solicitor advises Jack that whilst the proposed arrangement would protect his children’s inheritance, it would come at the expense of Jill’s autonomy to deal with the house as she may wish in the future.
The solicitor further advises that the ownership of the home would need to be changed to an ownership as tenants-in-common, rather than joint tenants, to achieve Jack’s desired goals.
Finally, the solicitor advises Jack that “simple wills” may suffice if he were comfortable that Jill would enter-into a binding financial agreement (prenup) with any future spouse.
Email Manny Wood, Principal Solicitor and Accredited Specialist in Wills and Estates at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487. This column is only accurate at today’s date and is not legal advice.
