Second Marriages Can I Leave My Wife Life Use To My House
This edition of the Koldin Report E-Newsletter is part of a series on questions we received from our “contact us” form on our website about Elder Law, Estate Planning and Medicaid.
All prior newsletters are saved on our website. You can read them by clicking here.
My wife an I are in a second marriage and we each want to leave our life savings to our own children. Can I leave my wife a life use to my house?
Example: Tom and Jill are married. It is a second marriage and they each have 2 children of their own. Tom owns the home. On his death, he wants Jill to be able to live in the home for the rest of her life and on Jill’s death, he wants the home to be inherited by his own children.
Tom’s Will or Trust beneficiary clause could say something like: “I leave my home to my 2 children, subject to a life use being granted to my wife, Jill.”
For families where everyone loves each other and there are no conflicts, simply granting a life use as part of a beneficiary clause can be sufficient. The problem occurs when unforeseen issues arise later on between the life owner and the remainder owners. Some examples of issues that can arise are:
(1) The remainder owners feel that the life owner is not keeping the property in good condition.
(2) The life owner fails to pay expenses such as property taxes, insurance, repairs, capital improvements.
(3) A major expense such as a new roof becomes necessary and the life owner and the remainder owners are unable to agree on how much of the cost each should pay.
(4) The life owner decides to rent the property to someone who the remainder owners do not like.
(5) The life owner decides to sell his/her life use to someone who the remainder owners do not like.
(6) The life owner would like to sell the home and move into a smaller home or apartment and the remainder owners are not willing to sell or they cannot agree on the sale price. The remainder owners are also not willing to use the proceeds of sale to purchase a new house or to use the funds to pay rent.
Although New York law does provide guidance on how some of the above conflicts should be resolved, if the deceased person provided greater detail of his/her wishes, conflicts can often be avoided.
One important method to provide clear guidance and instructions to avoid future conflicts is by establishing a “Life Use Trust” as part of the beneficiary clause of a Will or Living Trust.
By setting up a Trust and spelling out all of the “rules,” future conflicts can often be avoided. Also, you may have your own ideas for how you want different situations handled that would be different from the default rules under New York law. A Trust allows you to override the default rules to meet your particular objectives regarding your home and taking care of your family.
A “Life Use Trust” accomplishes the goals of providing for your spouse or other family members and also preserving the inheritance for your children.
One problem with establishing a “Life Use Trust” as part of your Will is that Wills need to be probated and this requires time and legal fees.
Another option to consider is to establish your own Revocable or Irrevocable Living Trust. The beneficiary clause of your Living Trust can leave your assets into a “Life Use Trust” for your spouse or other family members on your death.
For more information about Trusts, please see our website by clicking here.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options, including the advantages and disadvantages of Revocable Trusts and Irrevocable Trusts, along with other estate planning considerations including a Will, Power of Attorney, and Health Care Proxy. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
There is something you can do.