Wills and Trusts Case Study - Right to Reside in Property

Author:
Nadia Rimmer
Solicitor, Advocate
Date:
03/06/2020

Client Situation 

Our client, Mrs A is an elderly widow who lives in the home where she raised her six children. Her children were grown up and have left home. Five of her children were married with families of their own. Her last child, Miss C was not married and did not have a family of her own.

When Mr A died, Mrs A inherited the family home through the Right of Survivorship. Her Estate, including her house and her savings amounted to about £230,000. She’s always intended to split her assets equally between her six children when she dies, and her Will reflects that. 

Because her Estate is under the Inheritance Tax threshold, her family would not have to pay any Inheritance Tax but she wanted to discuss how she could support Miss C, who had recently had a change in her personal circumstances.  

Miss C had recently come back to live in the family home with Mrs A. It was clear that Miss C would continue to live with her mother for the foreseeable future. Mrs A was worried about what would happen to Miss C when she died and the property was split between all her children. This could leave Miss C in a position where she had nowhere to live.

Mrs A wanted to make sure she could legally protect Miss C to make sure she could continue to live in the family home after she died and still get an equal share of any future sale proceeds.

Mrs A’s Will was in place, but she’s made it as a Mirror Will with her late husband. Her existing Will offered no protection for Miss C and if Mrs A died, Miss C could be forced to find somewhere else to live or they could be a dispute about the sale of the property. 

Mrs A wanted to avoid any issues for her children after she died.

How We Helped

Mrs A came to see Wills and Trusts Solicitor Nadia Rimmer, for a free review of her existing Will.

After Nadia discussed Mrs A’s situation with her and reviewed her Will, she advised Mrs A to make a new Will which included a Right to Reside clause for Miss C.

With this clause in her Will, when Mrs A dies, the Right to Reside clause triggers the creation of a Trust. Her property will be automatically transferred into the Trust, which will be looked after by two Trustees she chose. Mrs A chose her brother and her eldest child. 

The terms of the Trust named Miss C as the sole beneficiary of the Trust. It gives her the legal right to live in the property after Mrs A dies. In addition, Miss C’s siblings can’t sell their share of the house because it is held in a Trust. This means that Miss C can continue to live there for as long as she chooses.

The Trust also stated that Miss C is responsible for the upkeep of the home whilst she lives there. When she decides to stop living in the house, the Trust will end and the Trustees can sell the property, dividing the money between Mrs A’s six children.

Mrs A also wanted to ensure that if any of her other children needed somewhere to live then they always had her property. Nadia therefore advised Mrs A to include a Letter of Wishes with her Will. This Letter of Wishes named Miss C as the main beneficiary of the Trust and gives guidance to her Trustees to let any of her other children to live in the house if they ever needed to in the future.

The Outcome

Mrs A’s new Will made sure that all her children are provided for after she dies. By putting her property into a Trust, she allowed her daughter to be able to continue living in the family home even after she dies and still receive an equal share of Mrs A’s assets.

Mrs A consulted with all of her children throughout the process of making her new Will and they were all in full agreement with her. This helped to avoid any disputes later as everyone was aware of Mrs A’s position.

Even though Miss C would benefit from living in her mother’s home, Mrs A never wanted to favour one child over another, so in her Letter of Wishes opened the offer to live there to all of her children if they ever needed it.  

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