JACK and Jill have been in a de facto relationship for 30 years. They each have children to previous relationships.
They consult a solicitor about their estate planning and decide to make wills providing each with a portable life interest in their home, with the remainder interest going to their respective children.
These types of wills are used to protect blended families in a way that provides accommodation for the surviving spouse, while ensuring that the children will be looked after when the surviving spouse ultimately passes away.
A “portable” life interest allows the surviving spouse to relocate and purchase substitute accommodation and the wills also cater for circumstances which may require accommodation in a retirement village or nursing home, for example.
Unfortunately, when Jack passes away, it is discovered that Jack and Jill owned their home as joint tenants.
This means that Jill became the sole owner of their home and the provisions in their wills regarding the portable life interest became meaningless.
The solicitor should have advised Jack and Jill to change the ownership of their home from Joint tenants to Tenants in common.
Jack’s children make a claim in negligence against the solicitor.
The Court finds that the solicitor had a duty of care to Jack’s children and that the loss that they suffered was foreseeable.
The Court notes that the joint tenancy could have been altered by Jack and Jill, either unilaterally or by agreement.
The Court further finds that if Jack had been advised of the effect of the joint tenancy on his testamentary intentions, that Jack would have instructed his solicitor to “sever the joint tenancy”, particularly given that the process is relatively inexpensive and straightforward.
Jack’s children were successful in obtaining an order for damages in the sum of $500,000.
Blended families can present challenges in terms of estate planning and it is important that the proper advice is obtained to give effect to your wishes and that the result is properly documented and legally sound.
If you have a request for a Hypothetical, call Manny Wood on (02) 66 487 487 or email manny@tblaw.net.au.
This fictional column is not legal advice.
By Manny WOOD
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