Real Estate Trusts for Second Marriages

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 (and the other spouse sells their home). This raises the question of how the home should be handled once the seniors have remarried and established their home in one spouse’s home. What would happen to the home in the event of the disability or death of the spouse who owns the home?

I recommend there be some written understanding in your will or trust that provides that the non-owner spouse has certain rights in the home for some period of time following the death or disability of the owner spouse. Further, 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 real estate trusts to hold title to the home that permits 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).

Next, there is the matter 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, basic maintenance, etc. But what about expenses associated with the house following the death or disability of the owner spouse? Most families provide that the surviving spouse pays the basic home expenses including utilities and basic maintenance. However, the surviving spouse probably would not want to be in a situation where they had to pay for a large repair like a new roof on the home or a new central air conditioning system, either of which could easily exceed $10,000. That is where it is appropriate to have clear rules as to what the surviving spouse pays and what the estate of the predeceased spouse pays.

In summary, many seniors remarry following the death of their first spouse. Resolving ownership rights in the home that the remarried spouses live in does take some thoughtful planning so as to avoid controversy at a later date.

Wesley Harris is an associate attorney at Farrar & Williams, PLLC and can be contacted at 501-525-4401 or by email at wesley@farrarwilliams.com. Wesley can answer any questions you have about this subject.