Wills – Second marriage and the family home

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Second marriage the family home

Second marriage will often create wishes for the ‘new couple’ that might involve will trusts. 

As a solicitor having dealt with wills and probate for longer than I care to remember, there isn’t much I haven’t seen. But themes appear over the years where clients with similar personal circumstances present with similar wishes for their wills.

In this series of articles, we take a look at some of the common such themes.  And, this article is dedicated to second marriage, and wanting to look after both the ‘new spouse’, as well as children from a previous relationship. Balancing those two wishes can present a greater challenge that clients may not have contemplated.

Factors impacting Wills for second marriage

There are typically a number of factors that seem to influence people’s wishes as regards their wills on second marriage.  They include:

  • length of time with ‘new partner’
  • ages of the ‘new couple’
  • financial dependency (or not) on each other
  • have the ‘new couple’ had children together themselves, or are there only children from previous marriages?

The main point of concern is often the new ‘family home’ and wanting to make sure the surviving spouse is able to reside there, whilst also wanting to ensure that children from previous relationships inherit too.

How to ensure the surviving spouse can remain in the family home

The answer to ensuring that the surviving spouse can remain in the family home is to grant them a ‘life interest trust’ in your share of it.  Subject to the terms of this trust (also known as an interest in possession trust), you can allow them to remain there for as long as either (a) they wish, or (b) they comply with the terms of the trust.  Common terms that might bring the trust to an end might include their failure to maintain the property, or also if they were to re-marry.

What should I think about when setting up a Life Interest Trust of the family home?

The concept is easy, isn’t it?!  Allow surviving spouse to stay in the house for as long as they like.  The practical reality can be rather more challenging however.  And, like so many areas of law, the metal of a trust is tested not when things are going swimmingly, but when things are going wrong!

So, clarity is key.  Try to cover off as many scenarios as possible as to things that would trigger the end of the trust, and/or things that would be permitted along the way.  Things to consider might include:

  • who is to maintain the property?
  • who is to insure the property?
  • Trustees – you should choose someone independent of the spouse and children to avoid a conflict of interest
  • can alternative properties be bought if the survivor would like to downsize?
  • what would happen to the balance of proceeds if a downsize happens?
  • can sale proceeds be used by the survivor if there is an outright – eg to fund care?

Don’t forget the passage of time

This is something that will often raise an ‘oh yes’ moment with clients. Don’t just think of where life is at when you make a will, think of where it is likely to be at significant moments when your will and your partner’s wills might take effect (ie on your deaths).

So, let’s take the example of a married couple, both have children from first marriages, but not together.  They both want to afford the other the opportunity to live in the house, but they also both want to ensure that their own blood children inherit.

And let’s go back to the aspiration that the balance looking to be struck is (a) allowing the surviving spouse to remain in the house, and (b) ensuring the ‘children’ inherit.

The point here is that, normal life expectancy prevailing, by the time the surviving spouse dies, your own children will likely themselves be heading into retirement.  All too often clients will see their children at the age they are at when making a will and forget what the reality would be when the time came for them to inherit.

Do you want to tie the hands of the surviving Spouse?

So, we’ve nodded to the fact that a will trust would mean that one aspiration would likely not be fulfilled for many years (ie the children receiving their inheritance as this won’t happen until the second spouse dies themselves).  But what about the other priority – the surviving spouse?

Well, you don’t need to dig too deeply to see that this isn’t ‘perfect’ either.  Firstly, assuming they own half of the property, and the trust owns the other half, it means that they remain beholden to the trustees forever!  And, things like moving [house] will all be subject to the involvement and agreement of the trustees (ie does it comply with the terms of the trust).

Give take compromise

You may find that compromise is inevitable to achieve what you’d like with your will.

What alternatives are there to a Life Interest Trust of the property?

The rigidity of a life interest trust is perhaps also its potential downside.  It locks things in place for potentially decades, leaving the surviving spouse beholden to the trust, and perhaps also not achieving what was wanted as regards children (of first marriage) inheriting, more particularly inheriting at a time of life that that money would be of best use to them.

The alternatives on offer will no doubt be governed by eg what assets comprise your estate, and coloured by things like how long you have been together as the ‘second marriage’.  Nevertheless, some obvious alternatives to a life interest trust might be found with the following.  They each rely on compromise, though one might argue that the life interest trust is not the utopian solution it sometimes appears to be at first blush:

  • simple mirror wills – making outright provision for each other, failing which ALL children (from both sides) on second death
  • cash legacies to children – house (and other?) to surviving spouse outright
  • Share of residuary estate – as opposed to cash legacies
  • licence for the spouse to remain – perhaps with cash legacies (to spouse) but residue to children (or a split of residue between children and spouse)

How would Mirror Wills work?

This requires a (substantial) amount of trust!  In this scenario, the ‘new couple’ simply leave traditional wills where everything passes to each other on first death, and then on second death to all children equally (ie to include children from both previous marriages).

The benefit of this is perhaps simplicity and leaving the survivor free of being beholden to trustees.  The downsides include the fact that the survivor could, if they wished, make a new will and cut out the children of the deceased spouse.

What about Cash Legacies?

Cash legacies (or indeed a share of residue) passing to children on first death alleviates some of the ‘risk’ with the mirror will example above – ie it guarantees your children get ‘something’.

Cash legacies are generally intended to be token gestures.  And so, as an alternative you could equally gift part of your residuary estate to your own children on ‘first death’.  That ensures your children get something and provides the survivor of you the freedom to get on with things without the shackles of a trust.

In simple terms, it provides a ‘clean break’ on your death, without things having to continue in limbo until the death of the second of you.

Licence to remain in the Family Home

This is a halfway house to ensure the survivor of you is not ‘out on their ear’ from the family home ASAP after your passing.  You can set the terms of the licence which in essence allow the survivor reasonable time to move (and thereby realise their own and your financial interest in the property).

You would of course also then need to specify how cash legacies, or the distribution of your residuary estate would happen.  This scenario would be aimed again at a ‘clean break’ after your own passing, without an ongoing trust.

What about Joint Tenancy -v- Tenancy in Common?

How you hold the property jointly is critical (joint tenancy or as tenants in common)!  We have assumed for the purposes of this article that you are joint owners on second marriage of the family home in question.  If you want to do anything other than the house passes to the survivor or you, then you MUST hold as tenants in common!  This allows us to gift our own interest in the property to whomever or whatever (eg a trust) we choose.  If you hold as joint tenants, the house will automatically pass to the survivor of you and, make the alternatives discussed here totally academic!

A joint tenancy means that a legal concept known as the ‘right of survivorship’ applies and the asset concern (the house in the instance) passes to the surviving owners irrespective of the terms of your will – ie it takes precedence over the will.

Top Tips if creating a Life Interest Trust of the family home

So, there are some of the salient issues you may want to be mindful of when thinking about the family home on second marriage, and whether you should or shouldn’t place it in trust.  To summarise, you may want to bear in mind:

  • passage of time – what would things look like in the event of the death of the second of you (not the death of the first of you)
  • beholden to trustees – ie do you want the survivor to be beholden to trustees for the rest of their lives?
  • compromise – is there a compromise whereby your children can ‘enjoy’ an inheritance at a time of life that is more useful to them?
  • mirror wills – could you run with the simple route of traditional mirror wills and trust the survivor of you to do the right thing?
  • clarity – if you feel a life interest trust is the best thing for you, clarity in the trust is so important. The devil is in fact not in the detail, but moreover in the lack of it!

Free Legal Guide

We hope you’ve found this (and our many other) guide(s) helpful.  Do please remember that they are just that – generic guides, so please don’t take them as legal advice specific to you.  Our expert solicitors can help with that!  So, if you need to, please reach out by calling us, emailing, or leave a comment below.  Meantime, thank you so much for visiting QLAW – the digital law firm for everyone everywhere!

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