Wills and step families... Wwyd?

[Russianfudge]

Hi there,

Me and DH are recently married and want to get wills written. We've never had them before.

I have an 8 year old, he has a 15 year old.

We want to leave everything to each other. But then how do we each protect our own child's share? For example, I die first and leave everything to him, he goes on to live a further 20 years then dies... During those twenty years he could remarry, have more children, lose touch with my dd, spend all the money on fast cars and loose women! Or, he could leave it all to his own dd meaning mine had nothing... How do people work this out??

(Just to clarify, he is not the type to do any of these things but best to be prudent!)

[mumblechum1]

Hi, I'm a willwriter and this is something which comes up all the time. If you wish to avoid the possibility of the survivor of you remarrying or even just falling out with the other's child and cutting them out, the safest option is to make a life interest trust in your house.

This involves you each putting your share of the house into a trust. When one of you dies, the other is able to carry on living there (tho' I always put in a portability clause in case they wish to downsize). If the survivor remarries or dies, the house is sold. The first person's share goes to whoever they nominated, even if the survivor decides to give their share to the dogs home or a new partner.

I have some blurb about it on my website.

[ElBumpo]

Mumblechum - can this only be done with the house and not joint cash assets/savings etc?

[poshfrock]

No, cash and other investments can be put into the trust too and the survivor can receive the income but the capital is protected. There is usually an overriding power of appointment clause included so that capital can be appointed to the survivor by the trustees if necessary.
You must be aware though that the house will need to be held as tenants in common for this to work and not as joint tenants ( this can be amended easily). Savings must also be held separately and not jointly otherwise the joint assets will just pass automatically to the survivor and not go into the trust.

[Russianfudge]

Thanks, that seems quite sensible and straightforward!

And presumably if they wanted to sell the house/ assets etc. my nominated person (my DD) would take 50%? Would this be left in trust until the person is an adult?

[Russianfudge]

I assumed savings would automatically go to the survivor if married?

So I could, say, leave 75% of my savings to my DH, and the rest to my DD?

[mumblechum1]

As Poshfrock says, this type of trust can also apply to other, non-property assets although that is more unusual.

when making this type of trust it is absolutely essential that it is held as tenants in common, not joint tenants (otherwise it won't work!). Severing the joint tenancy is very straightforward, it simply involves both parties signing a form which is submitted to the Land Registry who then register a restriction (or in plain English, the house is then held as tenants in common).

This also works well for older clients who are concerned about care home fees.

RF, you can certainly split your savings between your husband and daughter. Remember though that if you do that, your daughter's share will be held in trust until she's 21/whatever age you decide which may cause problems if it means your husband is struggling.

If the current home is sold and your husband buys a cheaper property then your share of the excess would usually go to your daughter (in trust if she was still underage). Your husband could of course do whatever he likes with his share of the excess proceeds of sale.

[poshfrock]

Can I just add as well that if the property is not registered with the Land Registry then the process of severing a tenancy is slightly more involved but not complex. Compulsory registration came in in most places in the 1970s so if you bought your house before then it may not be registered. My dad bought his in 1969 so not registered for example.