“When I die, will my kids have to move into a new house?”
“I don’t want the kids to have to move”
Protecting Your Childrens Inheritance – Many parents are concerned that if they die they do not want the family to have to move – they believe that the death will be traumatic enough without having to adjust to a new home as well.
Mark felt that way. His life insurance would pay off the mortgage if he died, so Jane and their three children would be able to stay in the home. He makes a will, which provides that the home is left to Jane, but she cannot sell it until all the children have stopped living there. This, he believes, is the perfect way to manage things after his death. He is also thinking that if Jane should re-partner, there will be a home preserved for his children.
Of course he will never know, but he may well be making problems for Jane and the children. The needs – and the wishes – of Jane and the children may well change as the years pass. The children are now 17, 15 and 13, so if the youngest goes to university, there could be 10 years before she graduates. And of course we have all heard the stories of adult children who do not want to leave home – parents are usually the cheapest landlords around!
If Jane is not well off, the costs of maintaining a home can be a real burden, and homes neglected can lead to financial problems and losses. Teenagers are not usually great at painting, gardening and the other myriad chores associated with home ownership. As time goes on, the home may no longer be right for Jane and the children. Jane may want to relocate, to be near her family herself – family support for a single mum is wonderful. Downsizing a home might liberate some funds to make life that much more affordable and pleasant
One of Mark’s concerns is to try to preserve an asset if Jane should re-partner. This concern to a degree pre-supposes that a new relationship might financially prejudice Jane and/or the children. His goals, while being perhaps understandable, may not be realistic, and the way he is seeking to achieve them might be a bit heavy-handed.
Is there a better way of doing things?
Within reason, you can make almost any provision you want in a will – all you are doing if you have some special wishes is making your lawyer’s job that much harder! What Mark has to do is think through the scenario – what problems could arise; what if Jane and the children do not want to live there any more and so on. And perhaps he has to face up to the fact that he will not be the family’s financial planner.
Most of the problems we have mentioned could be addressed reasonably simply. His will could provide for the substitution of a home, with perhaps a specified minimum percentage of the sale proceeds to be put back into the new home. Assuming that Jane is an executor, he could appoint a co-executor to work with her.
The lesson of all this – that sometimes seemingly good ideas need careful thought. Life wasn’t meant to be easy, was it!