Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 19 March 2016.
John and Jane have been in a de facto relationship for the last 15 years. They both have children from previous relationships.
John and Jane own their home jointly and John is concerned that when he dies, Jane will receive the house and that his children may miss out on their inheritance.
John consults a solicitor who advises him that a popular way to address this problem is to “sever” the joint ownership of the house and convert it to a “tenancy in common” in equal shares. John can then make a will, leaving Jane a “life interest” in the property and then upon her death, he can leave his half of the property to his children.
The solicitor explains that it is important for his will to allow Jane to relocate to a more suitable house if she wishes and also to address the possibility that Jane may need to seek accommodation in a retirement village or nursing home. This is sometimes referred to as a “flexible” or “portable” life interest.
This means that Jane will have her accommodation needs looked after during her lifetime but also that John’s side of the family is ultimately protected.
John also puts thought into the appointment of an appropriate executor and decides that the joint appointment of Jane and one of his children is proper in the circumstances.
John is advised that the courts have ordered that these types of arrangements be put in place when applicants in Jane’s position have challenged their late partner’s will.
John also decides that it is appropriate in the circumstances, to leave Jane a lump sum in addition to the life interest in the house, to meet her other expenses during her lifetime.
The solicitor advises John that it is important for Jane to put similar arrangements in place and invites her to make an appointment for this to occur.
