Apologies in advance for the complexity of this.
After Mum was widowed, she met and moved in with a widowed man. They never married but have lived together for about 20 years. Mum has some cash and shares inherited from my father. Her new partner has very little in assets. They bought a home as 50:50 tenants-in-common and wrote identical Wills stipulating that their respective children inherit their estates. The Wills also stated that the surviving partner can remain in the house as long as they wish. There is a schedule in the Will that states the deceased partner’s executor/trustee will set up a House Fund to contribute 50% of costs towards rates, maintenance and upkeep of the property. Once the surviving partner either moves out, sells or dies, the house is to be sold so the executors can distribute the estate. There is no separate co-owner’s agreement about how the property is to be managed after death. They are relying on the Wills.
Last year, Mum’s partner had a stroke which required him to move into permanent aged care. His daughter manages her father’s affairs.
As they are a couple, Mum’s assets have been assessed to calculate the aged care contributions which are very steep because her partner was not able to pay any RAD. Mum is now on a ‘separated by illness’ pension but she is still paying a huge amount each month for her partner’s fees.
There are a number of issues: They seem to think the Schedule in the Will will compel the executor/trustee to set up and pay funds into the House Fund for as long as the surviving partner remains there. It could be a decade or more. However, Mum’s partner has very little cash left. He contributes a small amount to his aged care fees but he is likely to be out of cash in the near future. Currently Mum pays the lion’s share of these fees.
What happens when those funds run out? Presumably Mum will be on the hook for all of her partner’s aged care fees.
How can her partner’s children (his beneficiaries) be expected to contribute to the House Fund if their father’s estate has nothing left to distribute except his share of the house? Surely his Will cannot compel his kids to pay costs for their father’s partner to stay in the house? They can say they can’t or they won’t and what are you going to do about that?
This also means they can’t settle their father’s estate until such time as Mum either moves out from the home or dies. She intends to stay in the home as long as she can as she will not be able to afford to purchase another home with her 50% share from the sale of the home.
If Mum’s assets were not taken into account, her partner’s fees would be so much less, and would be taken almost entirely if not entirely from his pension. Then his kids would not be expected to contribute to their father’s aged care fees from their small inheritance.
As it is, Mum is paying a huge amount for her partner’s fees and this is coming out of the funds Dad left Mum when he died. It is not a huge amount, but still, the effect of this situation is that Mum’s estate is being chewed up to ensure her partner’s estate is not. She wants the legacy of hers and Dad’s life work to go to her children, not her partner’s.
An estate lawyer drew up these Wills but I can’t see how a Will can compel beneficiaries to pay contributions to a fund to maintain a non-family member (as far as they are concerned) in the house their parent formerly shared with their parent, when the parent did not leave any cash to maintain the house.
So the two main questions are:
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How can a defacto couple’s Wills force their respective beneficiaries to pay into a fund to keep their parent’s surviving partner in their tenants-in-common house?
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Is there anyway Mum’s assets will not be assessed when determining her partner’s Aged Care fees? As noted above, they are huge because he couldn’t pay a RAD. It is nearly two years since the partner had his stroke. Mum visits him in the aged care facility, but in all other respects, they are separated. They received a couple’s pension and shared costs for their house, but in all other respects, they have always had separate bank accounts and paid for all their own expenses.