Solving a moral dilemma

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Every day we are fielding enquiries from people who wish to write Wills who have adult children and have entered into their second marriage.

Typically this creates somewhat of a moral dilemma for people because they want to provide for their children of their first marriage, but also make sure that their new husband or wife are properly looked after following their death.

One of the most common questions we get asked is ‘can I leave my house for my husband or wife to live in, and then pass it on to my children when he or she dies?’

The simple answer is yes.

There are a number of ways that you can dispose of your estate to make sure that your spouse has somewhere to live but your children are looked after as well.

Absolute Gift of Property and Residue Gift to Children

You can gift your property to your spouse absolutely, meaning it will become theirs and will never pass to your children. If you have cash and/or superannuation you could potentially direct this money to your children to ensure that all parties are taken care of.

Life Estate

A Life Estate gives a person a proprietary right in a property. Typically this means that a beneficiary will go on the title on a property for the period of their life meaning that are entitled to occupy and use the property for as long as they wish. You can stipulate in your Will that the property is to pass to your children on the death of the spouse. A Life Estate can be “portable”, meaning it can transfer from one property to another (for example if the beneficiary wanted to downsize from a house to a unit).

Right of Residence

A Right of Residence is a lesser right than a Life Estate. Essentially a Right of Residence constitutes a licence to use a property. A Right of Residence is usually for a specific period of time as opposed to existing for the life of the beneficiary.

You can also attach conditions to the above arrangements, for example that a Right of Residence is conditional upon the beneficiary keeping the property in good repair and paying for insurance, council and water rates.

If you find yourself in a situation where you want to take care of your defacto or spouse after your death but want to make sure that your children are the ultimate beneficiaries of your Estate, contact us to discuss how you can draft a Will for the situation.


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