How do we deal with a joint family home during a 2nd marriage?

How do we deal with a joint family home during a 2nd marriage?

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Aussie Legal Forums › Forums › Wills & Estate Planning Forum › How do we deal with a joint family home during a 2nd marriage?

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  • Sofeeya
    Sofeeya May 5, 2025 at 11:32 pm

    I got married again a year ago (2nd marriage) and this is my wife’s 2nd marriage too. We have children from our first marriage but none together. We want to sell our individual investment properties and buy a family home. I have read a bit about binding wills. Will this help us solve a problem if one of us passes away suddenly? Any experience with these?

    MV
    MV May 5, 2025 at 11:32 pm

    Hi Sofeeya,

    If I understand your enquiry, if you buy a house together in joint names as JOINT TENANTS, and one of you passes away, then the survivor receives the whole of the house. This is irrespective of what is in either person’s will as the survivorship rules means that he asset in questions does not form part of the estate and the will does not have any effect.

    In this case your respective children would not receive their share of your house (unless the survivor chose to leave it to them in their will at their discretion). You could overcome this issue by purchasing the property as TENANTS-IN-COMMON and each tenant/owner could bequeath his/her respective share in the property to his/her respective children. However, this would then mean that a co-owner would then need to contend and confer with the respective step-children which may be problematic. It may not also properly protect the rights and security of the surviving spouse to live in the property unless a life estate or right to reside is protected, and in many circumstances, this may not be adequate or sufficient provision for that spouse depending on that spouse’s needs or own assets.

    A binding will contract can resolve many of your concerns.

    This is how they can work:
    1. Each person writes a new will leaving their estate to their children except for the [say] 50% of the house in joint names which is left to the other party’s children.
    2. The 2 new wills are bound together by a contract which basically states that both parties agree that they will not write a new will without the written consent of the other party.
    3. If one person dies, then the surviving person may reside in the house for as long as they wish (provided they maintain the insurances and pay the rates etc).
    4. If the person choose to move out (say to a retirement village) then the house is to be sold and the proceeds divided between the survivor and the children of the deceased person (and that 50% is subject to the deceased person’s will).

    Kind regards,

    AussieLegal Moderator

    Sofeeya
    Sofeeya May 6, 2025 at 12:05 am

    Hi MV,

    What if we were to buy the house as tenants in common with 50% each. Does that work as well?

    Thanks,
    Sofeeya

    MV
    MV May 6, 2025 at 12:57 am

    Hi Sofeeya,

    Well no, it does not work as well as a binding will contract.
    If you each had 50% and one party died, then that 50% would be transferred to the children of the deceased party. These children may not want to wait years until the survivor wanted to move out. This is pretty reasonable given the current economic climate. The children could then force the sale of the house unless some new terms could be agreed. There is no guarantee that an arrangement can be agreed upon.

    The binding will contract offers certainty in the outcome.

    Kind regards,

    AussieLegal Moderator

    Sofeeya
    Sofeeya May 7, 2025 at 12:48 am

    Thanks MV.

    What if one party changes their will without informing the other party?

    Cheers, Sofeeya

    MV
    MV May 7, 2025 at 12:59 am

    Hi Sofeeya.

    If one party changes their will without getting the written agreement of the other party, and the affected party passes away, then the children of the deceased party can challenge the will of the surviving party and make a civil claim against the surviving party for breach of contract and seek financial compensation through the Supreme Court. It is not perfect, but there is a clear path to resolve the issue.

    Kind regards,

    AussieLegal Moderator

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