Many seniors remarry following the death of a spouse. Often, after remarriage, the seniors move into either the husband’s home or the wife’s home with the other spouse selling their home.
This is a major life change and raises the question of how the home should be managed in the event of the disability or death of the spouse who owns the home?
One solution is to make provisions in your will or trust that allow the non-owner spouse to maintain certain rights in the home for some period of time following the death or disability of the owner. Additionally, you might consider giving the non-owner spouse the first option to purchase the home in the event of the death of the owner spouse. Finally, some families establish a special trust, which I call a “real estate trust” to hold title to the home. The real estate trust has custom provisions for each unique situation and often allows the surviving spouse to have use of the home until the surviving spouse’s death or disability. Then the home reverts to the children of the spouse who owns the home (who predeceased). In some cases, the home may be co-owned by the spouses (when they decide to buy a house together) and in those instances, the real estate trust is far and away the best solution as it protects the interests of the spouses as well as their respective children.
By comparison, if the husband and wife purchased the home in their joint names, the law would create a right of survivorship in which the first spouse to die and their family would lose all interest in the home. Most families desire to avoid this unintended result so please be wary of jointly owned homes in these situations.
Next, there is the issue of who pays the expenses associated with the home. During the joint lives of the couple on the second marriage, most couples usually split the expenses including utilities, mortgage payments, taxes, insurance, and basic maintenance, etc. But what about expenses associated with the house following the death or disability of the owner spouse? Most real estate trusts provide that the surviving spouse pays the basic home expenses including utilities, insurance, taxes and basic maintenance. However, large repairs like a new roof on the home or a new central air conditioning system would normally be paid for by the trust or from the owner spouse’s funds. It is essential to have clear rules as to what the surviving spouse pays and what the estate/trust of the predeceased spouse pays.
In summary, many seniors remarry following the death of their first spouse. They often move into one of their existing homes, but in many cases, they elect to have a fresh start by buying a new home. The use of a real estate trust is often the proper thing to consider. Resolving ownership rights in the home that the remarried spouses live in takes careful planning so as to avoid controversy at a later date.
Adam Williams is the managing partner at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located in the Bear State Bank, 135 Section Line Road, Hot Springs, Arkansas. For more information about how our firm can assist you, contact us today at 501-226-4942.
By: Staff Writer