Leaving property in a will to under age children

[tgan]

I have recently started to think about getting a will organised, and have wondered how I can, with confidence, ensure that my very young children would get what i leave them. My husband isnt interested, he thinks he will never die!
15 years ago, when i was young, foot loose and free, I purchased a property with my hard earnt cash, and put down a deposit of $90k. This property is now an investment property and is worth about $650k with a small loan against it.
3 years after I purchased the property i married my partner who has children from a previous marriage and we then together had 3 more children. My partner was a widower so of course his children(now adults) lived with us. No issues there, all very good. When we married, my partner had no assets, in fact, only liabilities! I had the property and some cash!
During our marriage we have managed to work hard together and have purchased our home and 2 other ip's and are looking to extend our portfolio.
My question is, can I will the 1st property that i had prior to my marriage to our young children (since they are my blood children)? I view this property as mine(dont mean to sound selfish) and I want my children to have it. How can I be sure that this propety becomes theirs and only theirs and that their interest in protected?
Thanks in advance,
Tgan

 

[redwing]

I would speak to Terryw

What kind of will, Solicitor or Newsagents?

Have you specified 'why' you don't want other Children to benefit, otherwise it may/can be contested

If your desires are as per your post, it's worth getting specific advice

 

[agent007]

I have recently started to think about getting a will organised, and have wondered how I can, with confidence, ensure that my very young children would get what i leave them. My husband isnt interested, he thinks he will never die!
15 years ago, when i was young, foot loose and free, I purchased a property with my hard earnt cash, and put down a deposit of $90k. This property is now an investment property and is worth about $650k with a small loan against it.
3 years after I purchased the property i married my partner who has children from a previous marriage and we then together had 3 more children. My partner was a widower so of course his children(now adults) lived with us. No issues there, all very good. When we married, my partner had no assets, in fact, only liabilities! I had the property and some cash!
During our marriage we have managed to work hard together and have purchased our home and 2 other ip's and are looking to extend our portfolio.
My question is, can I will the 1st property that i had prior to my marriage to our young children (since they are my blood children)? I view this property as mine(dont mean to sound selfish) and I want my children to have it. How can I be sure that this propety becomes theirs and only theirs and that their interest in protected?
Thanks in advance,
Tgan

It looks you would need a will and binding agreements. However, dependents (if there are any), can always contest the will. I would suggest to get a will drafted for a solicitor that specialises in the subject.

 

[coastymike]

Have You Considered Looking Into A Testamentary Trust ?

 

[Terry_w]

You can leave the property to who ever you want. It doesn't mean the estate will pass that way though.

It is difficult to plan for 'blended' families. Careful consideration of a number of factors are needed.

If you left inadequate provision in your will for your step children, as dependents, then they could easily make a claim under family provision. Rereading I see they are adults and may no longer be dependants. In NSW they could not make a family provision claim (unless falling under a different category of eligible persons), not sure about VIC.

Make sure you deal with the loan in the will too. Does it go with the property or should it be paid out of the other assets of the estate.

You should also consider a testamentary discretionary trust within the will as there are good tax benefits and asset protection benefits too.

 

[travelbug]

I have a similar situation and put off writing will for years as I kept puting it in the too hard basket (crazy I know because of the size of our portfolio).

Terry wrote up our wills. I'm happy and can sleep at night.

Email Terry.

 

[tgan]

Terry hi,
can you please tell me what a testamantary discretionary trust is?
My children are young, 10 and 8, and 8, and i want to make sure that they
would get what i brought in to the marriage, and that it is protected until they reach an age to decide what to do with it. Beyond that, all other properties can be shared equally between all 5 children and husband.
Thx
Tegan

 

[wylie]

I would just say that no matter how clear a will is, no matter how things are set up (trusts, testementary trusts) the will can be challenged.

Of huge importance is documentation to go with the will, clearly explaining why you have left things the way you have, signed and kept safe. It doesn't mean there can be no challenge though.

 

[weg]

When the period a property is held within the union (12 of the 15 years in this case) becomes significant and much of the capital gains are made within that time, the harder it becomes to justify how it could belong to one person only.

I was in a similar position in that I owned a house with a LVR of 50% (probably the equivalent of having a house with a net worth of about 150K now) when we met but had we split years later for example, could not really justify how it would be my house only when most of the equity would have been made during the partnership.

Just stating this because I think the other children could think much the same as me.

Saying that I wouldn't contest it if I was one of the other siblings, but if there are three of them the chances of that happening are greatly increased.

 

[alexlee]

It would seem that a well-written will isn't enough, since it can always be challenged. Better to manage the expectations (and gauge potential responses by) the children.

For example, if you expect that the remaining children will contest the will, is it possible to move the property into a family trust while you're still alive, and give the shares of the trustee company to a trusted professional? There are, of course, capital gains and stamp duty implications.

 

[Terry_w]

Terry hi,
can you please tell me what a testamantary discretionary trust is?
My children are young, 10 and 8, and 8, and i want to make sure that they
would get what i brought in to the marriage, and that it is protected until they reach an age to decide what to do with it. Beyond that, all other properties can be shared equally between all 5 children and husband.
Thx
Tegan

Hi Tegan,

This is just a discretionary trust set up in the will. You could restrict the trust to just include your 3 natural children (and their bloodline) and it could be drawn up so the income from the property passes to them each year (via their legal guardian) and they could take the properties outright when they reach a certain age - 18 or 34 or any age) or they could keep the properties in the trust. You could have one trust or 3 trusts with one for each child.

This won't protect the assets from the will being challenged, but it can protect the assets from future spouses and/or future bankruptcies.

As the other children are not your natural children and they are over 18 they are unlikely to be able to challenge your will under family provision laws (at least in NSW, not sure in VIC) as they would not fall into the class of eligible persons. (assuming they are not dependants)

But your will could still be invalid for other reasons - not witnessed properly, capacity questions, it is lost etc. Then the intestacy laws would apply. In NSW if you die intestate with children to the surviving spouse only then this spouse would receive everything. The spouse could then dispose of the assets or spend the lot.

 

[Terry_w]

It would seem that a well-written will isn't enough, since it can always be challenged. Better to manage the expectations (and gauge potential responses by) the children.

For example, if you expect that the remaining children will contest the will, is it possible to move the property into a family trust while you're still alive, and give the shares of the trustee company to a trusted professional? There are, of course, capital gains and stamp duty implications.

In NSW step children are not able to challenge a will under Family Provision as they don't fall into the class of eligible persons. If they were dependent on you then they would.

And, in NSW, there is something known as notional estate orders in which trust property can be deemed to be part of your estate as can property disposed of within 3 years of death. Other states are more relaxed about this, but there are moves to uniform succession laws so things could change.

 

[tgan]

thank you for your advice,
tgan