Property Management Trust

Explanation of the Property Management Trust
A Will does not necessarily guarantee your children will inherit all your hard earned wealth.

Lets take the typical case of Mr and Mrs Smith. The reason they made a Will was to provide for each other and then their two children - very sensible. In the course of time Mr Smith died leaving Mrs Smith to inherit according to the terms of the Will. Sometime later Mrs Smith met someone and they decided to marry. The children were happy for their mother’s newfound happiness. Finally though the former Mrs Smith died.

The result was that her second husband under the Laws of Intestacy and her children lost out took the majority of the inheritance.

The question is why did Mr and Mrs Smith make the Will in the first place? Wasn’t it to take care of each other and then to pass on all the hard earned inheritance to the children? Was not that Mr Smith’s intention? Why didn’t it happen?

Most couples own their home as ‘Joint Tenants’. This means that if one joint owner dies the survivor would own the total value outright irrespective of what might be written in a Will. The alternative is ‘Tenancy in Common’. This means that each party owns a share of the property and can deal with it as they wish. The difference with this arrangement is that your children would be guaranteed to inherit at least some of the value of your home. This arrangement will also protect your share of the family home if your partner were to later remarry. A Property Trust incorporated within your Will would guarantee a right of residency to your spouse thus taking care of her/him but would not allow your share of the home to be passed to anyone other than your children.

Lets tell the story of Mr and Mrs Smith again.

Mr and Mrs Smith requested Acuity Will Writers to sever the tenancy of their home and make them ‘Tenants in Common’. Mr and Mrs Smith each made a Will incorporating a Property Trust to provide for each other and then their two children - very sensible. In the course of time Mr Smith died leaving Mrs Smith to inherit according to the terms of the Will. Sometime later Mrs Smith met someone and they decided to marry. The children were happy for their mother’s new found happiness. Finally though the former Mrs Smith died.

Mr Smith’s Will thoughtfully gave his wife a life interest in his share of the property. This was to ensure she would be taken care of during her lifetime, which she was. When she passed away his Will stated that his portion was to revert back to his children, to ensure his children would always inherit which is what happened. Everything went according to plan, and the beneficiaries lived happily ever after.

This also helps should one of you require nursing home care as only their share of the property would be taken into account, therefore preserving the share of the partner.