Name or Entity used to purchase a house?

[manny]

Hi there,

I have a friend who recently divorced & is looking at purchasing a unit with her settlement proceeds... She is currently living with a guy who is on a disability pension in a defacto relationship, however her children are living with her ex (which will remain that way)... The unit will be purchased by HER money & the defacto will not be contributing towards it in any way (actually, he has no money of his own)... For future security (in case she does split with this partner OR even passes away down the track), how should they make this purchase (stop him from making a future claim)? under her own name & have an up to date will naming her kids as beneficiaries? (kids are well under 18 & cannot be added onto the title - primary school ages) If purchased under a trust, she would be up for land tax, so trying to avoid that...

Any information you could provide me would be greatly appreciated, as I hope to lead her in the right direction (protect her kids future interests)... Note: she hasn't asked for this advice, however I wanted to suggest it to her before she makes any mistakes...

Cheers,

Manny.

 

[Raddles]

HI there
she could purchase in her own name and have a testamentary trust in her will which benefits the children - she should also think about entering into a legal agreement (with the defacto) which is a bit like a prenuptual agreement - which basically states he will have no interest in that property as she has made all the contributions and intends to benefit the children with her estate as it is.

 

[tubs]

So, after a few years, they're both committed to each other. Then if she dies, he gets kicked out on his ****. Is she considering any protection at all for him?

 

[manny]

Hi Raddles,

thanx for that...

Hi Tubbs,

I can't see that as being the case, but as the house or unit she will be purchasing (outright) is from funds obtained from her divorce settlement & the kids have remained with the ex, I thought it was fair for her kids to be the beneficiaries of this down the track (if things do go pair shaped or something unforseen was to happen to her)... I'm talking about 4 kids, all primary school age...

I assume any assets they do build up over time would be & should be shared between themselves...

I was concerned if things did go pair shaped in say a year or two that she may lose most of her pre-relationship assets, just looking out for some form of protection... As they say, better be safe than sorry...

Cheers,

Manny.

 

[tubs]

It can be a tricky issue. Without it, what could happen is
1. she dies, he gets the house,
2. he remarries
3 then when he dies his new wife gets the house, or their children.

Your friend's children wouldnt see one cent of the house their mother had purchased with her own money. Its a real tightrope to work out how to accomodate everybody's needs in a situation like this, and its encouraging to see it being done.