Our property is in my sole name, will my partner / spouse be homeless when I die?
Here, I am only going to be looking at properties where the surviving spouse or partner does NOT own the property.
I will not be delving into any Inheritance Tax matters or into any detail where a property is held as Joint Tenants – please check out our other articles for more information on these scenarios.
If you are living in a property with a spouse or loved one but the property is in only one sole name, the scenario where the surviving partner or loved one is left homeless could become very real…
Of course, if you are leaving the property to your spouse or partner in your Will, then there is no need to worry.
HOWEVER, if you are not married to your partner, or have children from a previous relationship (or many other scenarios!) you may want to leave your property to your children or someone else.
So, what happens to your partner - do they have to move out?
Ultimately, this will depend on the beneficiaries that you have left the property to and what they want to do with the property. They may decide they are happy for your partner to live there but want them to pay rent so that they can benefit from an income, or they may want to sell the property to release their inheritance immediately, or rent it on the open-market to try and obtain a higher income.
So, is there anything you can do to ensure your surviving partner isn’t left without a roof over their head, but your property still goes to those you want to inherit in the end?
Of course, I have an option for you!
LIFE INTEREST TRUSTS
A Life Interest Trust sounds a lot more complicated than it is, so let me set out the basics for you…
A Life Interest Trust allows the property owner (it doesn’t just have to be property, but let’s use this as the example), to pass the property to whoever they want to ultimately inherit the property but allows them to name someone (their partner, for example) to live in that property, free of charge, and benefit from the property until their death.
We could also look at including other stipulations like, not allowing the surviving partner to cohabit in the property with a new partner, or ensuring that the surviving partner could not live there if they remarried.
A Life Interest Trust is something that we would set up in a Will and only comes into effect upon the death of the property owner.
This may also be something that you would like to consider where you both own the property but each wants to leave your share of the property to different beneficiaries (perhaps children from a previous marriage or your own nieces/nephews).
Life Interest Trusts have many advantages but should be considered in detail before just being put in place.
Life Interest Trusts cannot be used where the property is held as Joint Tenants, as the property automatically passes to the surviving owner upon the first death. Again, this is something that we can consider and discuss as to whether it is advantageous to you, to change the way in which you hold the property (to Tenants in Common), and put a Life Interest Trust in place.
If you would like to have a FREE chat about your property and protecting your loved ones, please contact us on info@TotalLegacyCare.co.uk or 01727 865 121
Leah Waller
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