With most families having the family home held in joint names, if one of the partners passes away the surviving spouse will be the sole beneficiary owner of the home. I have highlighted below the risk associated with this and how we can help protect your family even if you are not here.
There are risk in leaving your assets to your partner as illustrated on the main ‘Estate Planning’ page. The same risks apply to your family home as illustrated below;
- The surviving spouse will enter into a new relationship and statistics say that the surviving spouse will remarry within 2-3 years time.
- If for some reason the new relationship does not work out, the surviving spouse and your family will be exposed to a third party in claiming up to 50% of the asset.
- This may require the surviving spouse to either sell the family home or borrow by utilizing the equity in the home to pay-out the future partner.
How we can HELP you
As part of the estate planning considerations, there should be provisions that if either partner passes away, the surviving spouse must execute the following;
- Establish a Corporate Trustee ATF for Discretionary Family Trust with the Surviving spouse as Director.
- Transfer the Family Home from the Surviving spouse name into the new Discretionary Family Trust structure.
- Yes this will result in Stamp Duty being paid (in Victoria up to 5%) on the transfer, however this transfer cost will ensure your family has full protection on the family home.
- Make alterations to your life insurance to cover the cost of transferring the asset into the new structure.
- You will eliminate the risk of losing up to 50% of the family home by making a provision for this transfer.
As you can see from the above literature, it is extremely important to place these instructions in place for the full protection of your family.
Should you require advice on estate planning and wealth protection, please complete our online enquiry form or simply contact our office on 8621 8485.