Balancing Competing Interests of your Children and a Second Spouse in the Family HomeProperty & Estates
John and Jane are in their 60s and have been in a de facto relationship for 10 years. They have both been married previously and each have adult children from a previous relationship. John entered the relationship with significantly more assets than Jane, including the home they now live in. John wants to ensure that in the event of his death, Jane’s lifestyle is not compromised but his children will ultimately benefit from his wealth.
John and Jane’s situation would traditionally be addressed via a Life Interest or Right of Residence to allow Jane the right to remain in the principal residence for her lifetime. These approaches have limitations in the event that Jane needs to relocate or access the value of the property to pay the costs of aged care.
To overcome these problems, John’s Will should include a Portable Life Interest over their principal place of residence in favour of Jane. A Portable Life Interest will allow the property to be sold and the sale proceeds to be applied towards Jane’s reasonable living expenses, an alternate property or an accommodation bond for an aged care facility. A Portable Life Interest can ensure as far as possible that Jane is looked after regardless of a change in her circumstances.
The terms of the Portable Life Interest can specify, what if any limitations or restrictions will be placed upon Jane’s ability to access the sale proceeds, ensuring there is something left over for John’s children.