When helping clients create their customized estate plan, we are often dealing with the scenario of a blended family. A blended family is a family where the couple’s children (or some of the children) were born from a previous relationship.
A blended family can face some tough decisions in their estate planning as they have to balance the need and/or desire to benefit both their own children as well as their current spouse from their estate. When it comes to property, we are often told by our client that they would like their home to go to their children when they pass but they don’t want their spouse to have to move out right away or at all for their lifetime. Is it possible to have it both ways?
The good new is yes, it is possible to achieve both of these goals! However, the bad the news is that the situation can lead to friction among the parties involved.
In a Will, an adult will-maker can grant to another individual(s) a ‘life interest’ in their property. This could be any property, however it is typically used for the adult and the individual’s shared principal residence. A life interest gives that individual (referred to as the life tenant) the right to use and occupy the property for the duration of their lifetime (or a shorter period as set out in the Will). The Will shall then specify what is to be done to the property after the death of the life tenant (or after the life tenant stops using the home as their principal residence). For example, in the blended family situation, an adult will-maker may provide in her Will that her surviving spouse may continue living in the couple’s family home for the spouse’s lifetime. Upon the death of the surviving spouse, the Will will typically stipulate that the home is to be sold and the proceed divided among all the adult will-maker’s children from a previous relationship.
A few tips to keep in mind should you wish to explore using a life estate in your Will:
- Who will pay for repairs? Expenses? Capital improvements or major improvements to the home will likely increase the value of the home and ultimately benefit the children. You could consider having a sum of money set aside from your estate to pay for such items. Or, stipulate that any improvements are to be done at the agreement of the spouse and the children and paid by both. You should also consider who will pay for ongoing maintenance such as water, sewage etc. Should this be paid by your estate? Or by the surviving spouse who is enjoying the property?
- Who should you appoint as personal representative/executor? Your executor will remain the person with legal authority over the home and will be responsible for decisions concerning the home. Should the executor be one or more of the children? Is this a conflict of interest? Will they get along with your surviving spouse? You should bear in mind that although the relationship between your surviving spouse and your children may seem fine now, this relationship may become strained following your death especially in the face of competing interests.
- What if there are any unforeseen circumstances that arise? The Will should be drafted carefully to take into account any possible scenarios as well as unforeseen circumstances. For example, what if the surviving spouse becomes ill and moves into long-term care? Should the life interest end at that point? Who should have the power to determine when the life interest is at an end?
Life estates can be a very useful tool in an estate plan, and one that can assist you to provide for both your surviving spouse and children of a prior marriage. However, this tool and its potential ramifications must be carefully considered such that the plan can be implemented with minimal friction.
At Touchstone Law Group LLP, we pride ourselves on providing high quality and customized estate planning services. This means, not only carefully drafting estate planning documents that correspond with your instructions, but also spending the time getting to know you and creating a customized estate plan that fits your unique needs and wishes. If you would like to learn more about life estates or the estate planning process, or if any of your documents need updating, please do not hesitate to reach out to one of our lawyers practicing in the area of wills and estates.
Author: Jennette Vopicka
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250) 448-2637 or any of our lawyers practicing in the area of wills and estates at the following:Jennette Vopicka: firstname.lastname@example.org Danielle (Dani) Brito: email@example.com Jane Otterstrom: firstname.lastname@example.org