Advice on houses/step families /wills

[Letitgoletitgo]

Dp and I are in the middle of buying a house, 50/50. He has one dc, I have two. We would want the house split so his dc has his 50%, my dcs split my half 25% each. However, what sort of clause do we need to ensure one of us isn't forced to sell up so dcs can inherite? I would not put it past dss mum to force me to sell my home so that dss could have his half if something were to happen to dp! So we need some security that if one partner dies,the other can keep the house until either they die and all dcs inherit, or they choose to sell and so the step child/ren inherit their portion. Does this sound right? How have other families worked it?

And incidentally, is it better to own as joint tenants or as tenants in common to help accommodate this?!

Thanks for advice!

[Quoteunquote]

and don't forget what happens if one of you dies and the other remarries.

[travailtotravel]

Its line is to you or your dp, then only to dependents after that.

[Letitgoletitgo]

Travail, I don't think that is true - if my dp left his share of the house to his dc, I could be forced to sell up so he could have this.
The issue with just passing to each other is that we are then relying on the other person to also remember our dcs in possibly years to come....

Suggestions are to be tenants in common with 50% share each, leaving our shares to our relevant dcs but with a life interest for the other partner. So basically no child can inherit until we both die - like in any nuclear family! I would assume that if one of us remarried, because they don't actually own the other half of the property, they simply have a life investment in it, that they cannot re write a will and redistribute it?!

Thanks for comments

[travailtotravel]

You can add multiple clauses. If your dp remarried after your death, should your dc inheritbat that point or wait?
Are you actually getting advice from a RL legal source? If you know what you want to happen, they should tell you how to do it.

[RandomMess]

Mumblechum is on here - advertises as Marlow Wills, she is the person to ask.

Yes there are clauses, including living interest etc. but there are various options and you need to get specific advice.

If one of you lives to a ripe old age all the equity may be gone on nursing home care...

[ThePlaceboEffect]

I would say right of residence clause for each of you until remarriage. Definitely Tenants in common as if you owned as joint tenants this would all be a moot point anyway as the house would automatically pass to the survivor of you.

[Mumblechum1]

My ears are burning! thanks Random for mentioning my company (there's a paid for ad over on classifieds btw).

OP, what you need is a life interest in possession trust in your wills. This means that, rather than just giving your respective shares of the house to the other spouse outright for them to do what they like with, you give your share of the house to your trustees to hold on trust for the benefit of the children in whatever proportions you choose. The surviving spouse can carry on living in the house until they die (or earlier if they remarry or cohabit).

The time between the two deaths is called the trust period, and the surviving spouse is the life tenant.

During the trust period, the life tenant has to look after the house, keep it insured etc but otherwise can just carry on living in it undisturbed. If they wish to move, they can do so, but the trustees of your will also have to sign the conveyancing documents etc. If the new house is cheaper than the current one, your estate's share of the surplus cash goes to your children.

I do lots and lots of these trusts, mainly for step families but also for older people who want to try to minimise care home fees in the future.

So far as the joint tenancy goes, it is absolutely vital for you to hold the property (and any future property) as Tenants in Common, not joint tenants in order for the life interest trust to take effect.

Feel free to ask if you need any more info.

[Letitgoletitgo]

Thanks mumble, that is so helpful and sounds right along the lines of what we want x

[notthe1Parrot]

Mumblechum did our wills about 2 years ago, incorporating the type of trust outlined above - she sorted and checked everything - very professional, and made it all seem so straightforward! It really gave us peace of mind.

[PolovesTubbyCustard]

Interesting.

We are in similar position and have yet to make our wills.

[Mumblechum1]

Notthe1Parrot Thank you! I'm glad you were happy with the service

[Mumblechum1]

When making a life interest trust in a will, you also need to consider whether the survivor will be able to meet the mortgage repayments. If not, I generally suggest that you talk to an insurance advisor to put in place either standard life insurance or a decreasing term policy to cover the mortgage specifically (which product you go for will depend in part on your potential Inheritance Tax liability).

[Letitgoletitgo]

Thanks mumble, we've already sorted the life insurance to pay off mortgage if one of us dies - decreasing term I think it was.
Have made an appt with same solicitor who is dealing with house move to write wills x

[Mumblechum1]

That makes a lot of sense! Do be careful about decreasing term insurances for the mortgage, as it can have an adverse effect on IHT liability. Your broker will explain all that in detail. It won't matter if the estate is well under the IHT thresholds even with the mortgage being paid automatically, but otherwise you may be advised to have the insurance on a discretionary trust.

[Letitgoletitgo]

Thank you all for advice! So we have appt to sort wills next week - anyone want to suggest any other things dp and I should be talking through before then?! Thank you x

[Kangaroo123]

Interesting thread, sorry I've come onto it late. I wish my DP was doing this with me!

A question OP - how did you agree on 50/50 split? My DP seems to think any inheritance must be split evenly between all children/step children. Except he has 5 and I have two!

Also, are you and DP sharing any other equity, savings or assets? Or just the joint house?