A lot of Will trusts over houses ensure that an occupant (be it spouse, partner or another relative) can live in the deceased’s property for life, while protecting the underlying equity for the benefit of children. This is very useful, for example, where a testator wants their new spouse to remain in the property after they die, but wants their children from their first marriage to have their interests in the property secured.
Most property trusts involve a “life tenant” who is given rights of occupation, and “remaindermen” beneficiaries who obtain the capital on the death of the life tenant. This sets up the “two-tier” rights for most scenarios: e.g. stepmother can live in the property for now, but on death, the children can take the house entirely.
However, a fatal flaw often arises in these Will trusts where the life tenant is accidentally included as the remainderman. This can happen because of a drafting error, or an oversight on behalf of the Will writer.
In those cases, the life tenant then becomes entitled to the underlying equity instead of the remaindermen. This hands the whole property over to them, defeating the whole purpose of the trust to protect the remaindermen’s shares.
It is possible to correct this: either through a deed of variation (but only if the life tenant is willing, which in difficult stepfamily scenarios may not be viable); or through a Court order to have the Will rectified. Both of these options involve additional legal work, time and expense.
Prevention is better than the cure. Check your Will and consult with your Will writer now if you have any such life interest trust in your Will, and see whether your family’s interests are secured precisely as you intended. It could save a great deal of grief in the long term.