Divorced - new partner - Protecting assets (house) after death

Hello,

My situation - 50 year old divorced father of two (daughter 21, son 19). In a new (very happy, long-term - 8 years so far) relationship (not married. May, one day). Partner is 38. Mother of one (daughter - 9).

I own a house. Value approximately £1 million. Mortgage approximately £300,000. No other significant assets.
Partner, until recently, was a Council tenant. Has now relinquished her Council tenancy and moved in, with her daughter, with me (about a year ago).

My will currently leaves my estate to my two biological children. This is no longer appropriate, as if I die, my partner would be in a very precarious position.

If I predecease her (likely, given our ages) I want my partner, and her daughter, to be secure, until my partner dies. I would then like the estate to be split equally between all three children.

If I simply will my estate to my partner, I fear there are many risks. I wouldn't want her to remain single forever. Equally, I don't want to share whatever assets I've accrued with any future partner/husband she may have.

I don't mean for this to appear unreasonable, or churlish. I'm not wanting to control the future from beyond the grave, and I want my partner to be happy, and secure. I don't even want to prevent her moving home, if she wishes. But, I need to make sure that my kids don't lose an inheritance - for example, if she married. She's also very financially naive, and would give away her last penny to anyone who asked! Endearing, but also infuriating, and worrying!

I've spoken to her about this. She is anxious that should I die unexpectedly, she would rapidly be homeless. But she also thinks I'm mad for trying to plan for something that she doesn't think could happen. I'm an engineer. I plan for all foreseeable situations!

I've read that a Trust may be a solution, but it's hard to find definitive information on this.

So, essentially, am I delusional, or is there a way to achieve this?

Thank you for reading this far.

Comments

  • jackieblack
    jackieblack Posts: 10,292
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    edited 20 June 2018 at 1:13PM
    Yes, a trust is the way to go. Your partner could then have the right to remain living in the home for however long and with whatever conditions you wish, and have the property pass to your children afterwards. This is known as a life interest.

    You do need to get professional legal advice and your will drawn up properly though because if you get it wrong you could potentially leave a terrible mess and a lot of hurt and it may not end up as you intend and wish.
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  • gettingtheresometime
    gettingtheresometime Posts: 6,911
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    edited 20 June 2018 at 2:32PM
    whilst I understand your concern and wish to look after your partner, I think you need to be very careful about the wording of the trust.


    The reason I say that is that my FIL put in place a similar wish (ie partner could live in the house until she died/remarried/decided she didn't want to live there with the proceeds when sold to be split between his children & her in varying %ages)


    It was badly thought out so much so that it's been over 10 years since he died & potentially OH could die before he receives an inheritance as a result.


    I would add this means already she's lived in the house at least 3 times longer since his death than she was with him in total and there are no dependant children to consider.
  • Keep_pedalling
    Keep_pedalling Posts: 16,232
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    Whatever trust you set up your estate is facing an IHT tax bill when you die, so you either need to cover that through an insurance policy, or get married.
  • ALIBOBSY
    ALIBOBSY Posts: 4,527
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    Definately need to do a will, but rather than a trust wouldn't a possibility be to make her a "tennent in cpmmon" on the house, giving her say 25% of the value so she would be left with a lump sum once the house sold to help her find somewhere to live?

    You need to have a chat to a solicitor about the options and decide how much you wish to leave to your partner, how much to the kids.

    Good luck
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  • TBagpuss
    TBagpuss Posts: 11,198
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    It's certainly possible, you would need to set up a trust. However, you'd need to get advice and work out the impact - for instance:

    - How will your estate pay the IHT due?

    - Can your partner afford the running costs of the house on her income, or would she be better off if she were to move to a smaller property?

    - your partner is only 17 years older than your daughter. Given that you say you don't have other assets except the house, this could mean that your children don't get any inheritance until they are in their 60s or 70s. You may be fine with that, but you ma want to consider other options to enable you to ensure that your partner and children are all supported after your passing.

    You could think about an arrangement whereby you give your partner the right to remain in the house for a fixed period after you die - maybe 1 -2 years, and then provide for it to be sold and the proceeds split between her and your children - this would allow her to rehouse herself, after giving her time to grieve, and would also allow your children to receive money from the estate . It would probably be possible to do this so that the funds she did get were held in trust to go to the children after her death, if you wanted.
    All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)
  • Thank you all for your very helpful comments and advice. It's a minefield! I am seeking professional advice, and looking forward to some sleepless nights trying to come with a solution that is fair to everyone.

    Thanks again.
  • Thank you all for your very helpful comments and advice. It's a minefield! I am seeking professional advice, and looking forward to some sleepless nights trying to come with a solution that is fair to everyone.

    Thanks again.

    Would it be worth just giving her a 1/3? If you were going to spilt it between the children equally you are essentially giving your partner her child's spilt that way and then it is her decision whether she wastes it or invests it in a house for the future of her child.
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