Why Wills in Blended Families Need Extra Care.
Estate planning can be complex, especially for blended families. Here we share a scenario that explores the importance of reviewing your wills after a change in life circumstances to ensure you look after all of your family members.
Rose and Ben met through mutual friends. Rose had been divorced from her husband for many years, and Ben’s wife had died a few years before. They immediately got on well and very quickly became a couple. Their respective children were delighted for their parents and were supportive of their relationship.
Both Rose and Ben were living in properties that were too large for them. They decided that it would be a good idea to pool their resources and buy a home together. They put their own homes on the market and went looking for a new home to buy together. Rose’s house sold for more than Ben’s but because of the value of the house that they purchased together, they were able to put equal dollar amounts into the new house.
When they went to see the lawyer, he suggested that they might want to think about a contracting out or “pre nup” agreement. Neither Rose nor Ben were that keen. They felt that they were putting equal amounts into the property, so if they separated it would be split 50/50, and any other money they had was before the relationship so provided that was kept in separate bank accounts, if they separated neither would have a claim on the other’s funds.
One thing that they were concerned about was to make sure that if one of them died, the other would have the ability to continue to live in the house.
They thought that they would provide each other with a right to occupy the home until the survivor of them either met someone new or had to move out as they could no longer live there or had died. They were keen for this rather than leaving the whole of the property to the survivor as they still wanted to make sure that they left their assets to their children. They thought that this may change over the years but knew that they should review their wills every 3-5 years or earlier if circumstances changed.
Sadly, after they had only been living in their new home for 18 months, Ben suffered an unexpected heart attack and died. Ben’s daughters, who had until he died, been supportive of his and Rose’s relationship, turned nasty, turning up at the house and demanding items that had been their father’s. Rose came home one particular day to find one of Ben’s daughters in the study, going through various financial papers. She had let herself in with a key Ben had given her in case of emergency. Rose was furious. She decided to go and get her own legal advice on the life interest situation, as she was keen to know if she could extricate herself from it so that she would no longer feel beholden to Ben’s daughters.
Rose went to see a lawyer who had been recommended by a friend. The first thing the lawyer did was a title search – this showed that Rose and Ben had owned their home jointly. The lawyer said what this meant was that Rose had inherited the whole of the property by survivorship.
The life interest provisions in Ben’s will were irrelevant as Rose now owned the whole property.
Rose was shocked. The lawyer who had acted on the purchase of the property had not done the job properly. If the title had been registered correctly, then there was an option for Rose to negotiate a buy out of the life interest, so that she could pay Ben’s daughters out now on their share of the property, at a calculated discount.
However, Rose was a good person – the fact that she now owned the whole property, she knew that was not what she nor Ben had wanted to happen if one of them died. She asked the lawyer to write to Ben’s daughters, pointing out that Rose now owned the whole of the property, but that she would honour the life interest provisions in Ben’s will and offer to buy them out of their share in the property.
This situation points out the difficulties of dealing with wills in blended family situations and the necessity to get good, robust legal advice. It is also important to keep assessing your legal documents to make sure they are doing their job and to deal with changing family dynamics.
If you feel you could use some specialist advice for your personal situation contact our Trusts & Wealth Protection Team.
