John Smith, aged 45, lives with his partner Susan Doyle, aged 51. John has three children, two from a previous relationship; Joshua aged 17, Emily aged 12, and a daughter with Susan, Tessa aged 5. Susan also has a daughter, Charlotte aged 26 from a previous relationship.
John and Susan own their current residential property jointly. John owns a house solely in which his mother, Margaret lives in. John’s Estate is worth £320,000 in total, including all the assets and savings he has. Susan’s Estate is worth £185,000 in total, including all the assets and savings she has.What are their wishes?
• For Margaret to be able to live in her current residential property for as long as she is alive if John predeceases her
• Once Margaret has passed away, John wishes for the house to be split equally between his 3 children
• They would both like their share of Estate to be given to their partner and then to their own children
• John is concerned that if he dies and his partner marries a new partner that his children could be disinherited
• Susan was concerned that if either of them die and the other has to go into a care home their children may not inherit anything
With regards to John and Susan’s Will, we would advise including a Property Trust within their Wills. This will allow the surviving partner to live in the property for the rest of their life but their 50% of the property would then go to their own children in equal shares. This means that if the surviving spouse then marries their children would still receive their share of the property and would eliminate any chance of them being disinherited.
Having a Property Trust in the Will also reduces the chance of a local authority forcing the sale of the property to pay for care fees if the surviving partner needs to go into care. To do this we would need to sever the title for their residential property from ‘Joint Tenancy’ to ‘Tenants in Common’.
We would also recommend including a Half Property Trust within John’s Will to give Margaret the right to live in the property until she wishes to end the Trust or when she passes away. The named final beneficiaries of the Trust will be John’s three children, Joshua, Emily & Tessa. This will also protect against disinheritance.
As John’s children are all under the age of 18, we would recommend that any gift to his children would be placed into a children’s Trust. This allows John to stipulate an age (between 18 & 25) at which his children would inherit to ensure that they are responsible enough to receive such a gift.
We would also recommend John creates a Property and Financial Affairs LPA to fully protect his assets and family.