It is not unusual for people to get married, have children, get divorced and get remarried, but this can make it difficult for individuals to provide for the children from their previous marriage/s and their new spouse on death.

The problem

Most married couples want to leave their estates to each other on first death and then for their combined estate to be divided into half on second death to be passed to each of their respective families. 

This is usually done by mirror Wills, but the problem is that the surviving spouse can change their Will after the death of the first spouse and leave everything to their own children, cutting out their stepchildren and therefore, there is a chance that one side of the family may lose out depending on the order of death.

Life interest trust

A common way of protecting assets is to use a life interest trust, and most often, this is over the marital home so that each spouse owns (typically) a half share of the property as tenants in common. 

Each spouse then writes a Will leaving their share of the property into a life interest trust so that the surviving spouse has a right to income. This effectively means that the surviving spouse can live in the property for the rest of their lives rent-free, and on the death of the surviving spouse, the trust will end, and their share of the capital will pass to their own children.

Previous marriages and life interest trusts

Action point

Quite often, nothing further is done after the first death as the surviving spouse continues to live in the property, which means the legal title of the property is in the name of the deceased and the surviving spouse. 

However, problems can arise if the trustees do not take any further action on first death to secure the trust assets by adding their names as trustees onto the Land Registry so that the proceeds of the sale are paid to each of the estates.  

A third party dealing with the sale will note the first spouse has died and then take instructions from the personal representatives of the second spouse, which are usually their own children and provided there are two personal representatives, the funds will be paid to them as the legal owners to distribute in accordance with the terms of the trust.

The trustees of the life interest trust may be the children of that deceased, and they are likely to also be the beneficiaries, so any loss will be of their own doing if they cannot recover the funds. However, if they are not, the trustees are personally responsible for any loss to those beneficiaries.

Here to help

If you are a trustee and require advice regarding the administration of the trust or your duties, please get in touch with our specialist Wills, Trusts and Probate Team below.

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