Blended family issues

My husband built a home while we were dating. I'm his second wife. It's in his name. I moved in shortly after. We've been together 13 years, lived together and now married for 5 years. I do all the housework and have paid for everything in the house ie furnishings, etc. We're in our 60s. We built a rental property in joint names. He has a commercial property in his name with a mortgage of $400,000 on it worth approx $1.5 mill. Our Wills state that I get our home for life tenancy then his 2 kids get it after my death. They also get the commercial property. The rental property will go to my son after my husband's death so it is based on trust if I die first as we are joint tenants. If he gets dementia, the Will could possibly be altered by his kids. I really think I should get our marital home if he dies before me as I don't really want to live here but he won't budge. I'm not close with the stepkids. I feel like I have no power here. The Wills have been drawn up by an estate lawyer to reflect the above but the lawyer said it is definitely possible my son could lose the property if hubby changes his Will when I die. I have asked for the rental to be put in my name but he refuses at this stage as we use it as a tax deduction. I am getting depressed over it all. His kids both have good jobs and homes, my son is renting. I don't have any other savings as it all went into building the rental property. What do others think? Am I over thinking it all?

 

Wills cannot be altered by kids or attorneys

not over thinking it could happen like that but you could always make a family provision claim as that is unlikely to be adequate provision for you

best to seek your own legal advice.

 

no

they could possibly sell an asset though

 

Have a chat to a lawyer about maybe putting the rental property in your and your husband's names as 'tenants in common' instead of 'joint', and then you can leave your share of the rental property to whoever you want (you can leave your share to your son and he can leave his share to his children).

 

And he doesn't even necessarily have to agree that that! I believe one joint tenant can sever a joint tenancy as long as the other owners know about it.

 

Would he be willing to put the family home in both names? That way it could be sold on his death and you'll get half if he leaves his half to his kids???
But he may want to leave his half of the IP to his kids as well? Is the IP tenants in common or joint tenants?

 

Each owner may also be able to seperate their respective borrowing for settlement of the acquisition. Everyone focusses on legal title but a loan can also be a personal liability and not a something for a 50% division of assets. This comes up with credit cards. In Mrs Smiths name. Its HER liability. Same as Mr Smith may struggle to have the family court pass on half his card debt to Mrs Smith. Same applies to some property loans. eg Those that are not joint. Using JOINTLY borrowed money to buy a property in one name means the loan is a marital joint liability. It will be considered that way on a property settlement decision. And death.

eg Mary and Fred. Mary has $1m cash. Fred has little cash. They could pay cash to buy a new property for $1m but then Mary exposes her cash. So instead Mary allows Fred to seek a loan ONLY in his own name for $500K and Mary injects $500K of cash. The property is used a loan security. On divorce or death the loan is Freds. It doesnt affect Mary directly. Mary has "clear equity" where Fred does not. This may better assist marys estate plans. Mary may leave her 50% of title to her sister. The alternative is they BOTH borrow $500K. Now this is a JOINT borrowing and that reduces marys estate for half if she dies. Marys estate includes $500K of cash, half a property and no debt. She leaves the property and half the cash and her super to her sister. Fred gets $250K cash and this may be adequate provision to avoid a estate claim. Fred gets half the property and its debt and that cash. Her sister now has a seemingly unencumbered 50% interest and no debt but this remains exposed to Fred making his loan repaymnets of course. If sold the respective interests would be adjusted for FREDs loan discharge from his portion of proceeds.

All valid reasons to seek legal advice. In Marys case Fred may not even realise Mary is acting to safeguard her part of the property. Mary may have a will that changed to leave interest in the property to her sister and she isnt obliged to tell Fred. Too many people assume loans must be joint when there can be very sound reasons for each onwer to respectively settle their portion. This may also assist tax deductions so ONE owners gets all the interest deduction and the other has 50% positive income with no interest to deduct. In such cases the equity, servicing etc may allow a lender to approve one borrower. Usually spouses must be on title for a single borrower and two owners but not always. There are lenders who will lend two loans to two borrower and both on title eg friends. They usually cross guaranatee each others loans as a lender safeguard.