Securing Your Legacy: Ensuring Your Surviving Spouse Transfers Property to Your Children Upon Their Passing

Throughout our years drafting Wills for our clients, the occasional prudent client/willmaker will ask us to draft a Will ensuring that their surviving spouse, upon inheriting their property as the next of kin, will eventually pass it to the original willmaker's children when the time comes.

The original willmaker may consider life estates, the right of occupancy and mutual Wills to guarantee that their children will eventually inherit their estate from their surviving spouse.

Life Estates

A life estate gives the life tenant the right to occupy the property, and sell, rent or use the property for their benefit. Upon the death of the life tenant, the right of ownership is reverted back to the beneficiaries in the original willmaker's Will. The identities of the life tenant and the remainderman are often stated in the Will of the original owner.

Life estates have mostly fallen out of vogue in 2024.

Nevertheless, life estates continue to be mentioned as an effective means for willmakers to pass on real property/house/land to their surviving spouse, while simultaneously guaranteeing that this property will ultimately go to the willmaker's children rather than a new spouse in the event of a remarriage. This concern is not uncommon among willmakers with blended families, where it is foreseeable that the surviving spouse will prioritize a new spouse over stepchildren to a previous marriage.

In such a case, a life estate can be considered, but parties should only create a one with their eyes wide open.

Implementing a life estate in your Will can bring about unforeseen problems down the line. It is inherently awkward to hold a form of temporary ownership over a property. It would be hard for the life tenant to take out loans using the life estate as security, and even harder to sell the life tenancy to anyone other than the remainderman.

Moreover, the situation becomes even more challenging when the life tenant also holds the role of the executor or trustee for the estate of the original owner. As an executor, the life tenant may lack the incentive to invest in the preservation and maintenance of a property that they own only temporarily until their death. This is especially so if they have been granted significant discretion in determining how the estate's funds can be utilized for property upkeep in their role as an executor. The competing interests of the remainderman and the life tenant might create tension within the family.

Right of Occupancy

The right of occupancy is the mere right to live in the property. It can be narrowed down to occupation in a single room in the house.

The right of occupancy is extinguished upon non-compliance with any conditions attached to this right, such as to keep the property in a reasonable state of repair. These conditions are usually laid out in the Wills themselves. The Will can also impose a time limit on this right of occupancy.

Gifting the right of occupancy to your next of kin, while gifting ownership of the property to your children, may create unanticipated challenges for your next of kin in the future. As your next of kin ages, they may encounter difficulties in maintaining the property or may eventually need to move into a nursing home, resulting in the extinguishment of their right of occupancy. In such a scenario, your next of kin may find themselves inadequately provided for.

Mutual Wills

We strongly advise individuals who are concerned about their surviving spouses potentially gifting their properties to a new spouse upon remarriage, consider the option of mutual Wills.

Mutual Wills are designed to create a binding agreement where both the willmaker and surviving spouse mirror each other's Wills, committing to bequeath specific properties to their children upon their passing. This arrangement ensures that neither party can unilaterally revoke their Wills without notifying the other spouse, as long as the spouse retains the capacity to make changes. Consequently, mutual Wills effectively prevent the surviving spouse from revoking their Will once the original willmaker has passed.

While mutual Wills sidestep the problem of temporary ownership over a property, it still remains a tricky piece of legal document.

It is of the utmost importance that you seek legal advice when planning your estate. We make it our priority at Greigs Legal to ensure your best interest and provide the guidance needed to navigate these complexities effectively.