Hypothetical by Manny Wood Published in the Coffs Coast Advocate on 1 February 2020.
Bill, married to his second wife Mary, has two children to a previous relationship.
Bill consults his solicitor about making a will that looks after Mary as well as providing for his two children.
He is advised that granting Mary the mere right to reside in his home for life may not be seen as adequate provision if she was to challenge his will. He is advised to consider granting Mary a flexible interest whereby she has the ability to relocate to more suitable accommodation and if necessary, the house can be sold and the proceeds used to fund accommodation for Mary in an aged care facility. When Mary ultimately passes, the house or if applicable, the refundable accommodation deposit can then be given to his children.
However, Bill is advised that the accommodation costs, if paid by way of a refundable accommodation deposit, may not necessarily be repaid to his estate once Mary vacates the facility and that it is important for his executor to enter into a written agreement with Mary or alternatively negotiate suitable arrangements directly with the aged care facility or nursing home.
He is also advised that accommodation costs can be funded by way of non-refundable daily accommodation payments. A combination of non-refundable and refundable payments can also be adopted. Bill is advised that the aged care facility will normally have the power to deduct unpaid daily accommodation payments from the refundable accommodation deposit. This means that if Mary does not meet her obligations regarding the daily payments, the refundable deposit or bond that is intended to benefit his children may be depleted.
Bill is advised of the importance of appointing an appropriate executor to make these decisions when the time comes.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
