A client told me about a situation some friends are in. It would appear, it is not totally unique, and talking to others, the situation may be on the increase.
I have listed below some of the common characteristics:
- Couple (Man and Woman) typically aged 40 may be married or not.
- Have recently bought a house together on a mortgage and set up home.
- Typically have young children. The children may not be the children of both parents.
- The mother of the female partner has sold her house and has helped provide the deposit for the new house, she also lives with them.
These cases raise a few questions, in particular when writing Wills for them.
- Did the couple take any professional advice before purchasing the house?
- Have they considered the situation should one of them die prematurely? Would the survivor want to remain in the house with the mother in law?
- What happens if one of the couple has died, and the surviving partner meets a new partner? Where do they live?
- If they require Wills is it possible to advise both partners at the same time during the same meeting?
As the house is jointly owned, the male partner would clearly own the house on the death of his partner providing they have life insurance covering the mortgage. It is therefore difficult to
An option is to sever the tenancy of the house, (so they each own a half share) and the Wills could include “right to occupy” clauses, allowing the mother to remain in the house etc. but they
leave their share of the house to each other.
This could create another problem. As the mother now has a right to occupy the house, on her death she can be taxed for inheritance tax purposes as if she has owned the house. If it is a
valuable house, this could create a tax bill on the death of the mother.
As always, the moral of the story is take good advice before doing anything!