Someone else living in your house?

Someone else living in your house? We don’t mean the kind of uninvited house guest who eats your food and sleeps in your bed (rude!).

We mean someone you love who relies on you for their home.

Maybe it’s an adult child who hasn’t moved out yet. A parent who has moved in with you. A sibling. Or another loved one who relies on you for accommodation.

If you die, what happens to them?

This is something you can plan for as part of your estate plan.

Start with the big questions

Before deciding what should happen to your home, we need to understand the arrangement you have with the person living there and what you want to achieve for them.

Questions might include:

• Do you own your home, and how is it owned?

• Does the person living with you have any ownership interest in the property?

• Do you want them to continue living there after you die?

• If so, for how long?

• Should they be able to live there for the rest of their life, or until another event happens?

• Who should pay the rates, utilities, insurance, repairs, and maintenance?

• If you don't own the property, is there another way your estate could help with their accommodation?

• What might this person need for their longer-term care and living arrangements?

• What happens if their circumstances change?

These questions matter because there are different ways of providing for someone who lives in your home.

What could your estate plan look like?

Depending on your circumstances, you might:

Leave money to help with their living expenses.

You could provide a gift or establish a structure to help fund some or all of their accommodation and other expenses.

Give them a right to live in your home.

Your Will can potentially give someone a right to occupy your home for a specified period or subject to specified conditions.

A right of residence is different from giving someone ownership of the property. The terms need to be carefully considered, including what happens if the person moves out, wants to have someone else living there, or can no longer maintain the property.

Create a life interest.

In some circumstances, a Will can give someone a life interest in a property, allowing them to use the property during their lifetime while ultimately directing the property to another beneficiary.

This type of arrangement can be complex. The Will needs to deal with things such as maintenance, insurance, rates, expenses, and what happens in different circumstances.

Use a trust structure.

Depending on the circumstances, a testamentary trust may provide a useful way to manage assets for the benefit of someone who needs ongoing financial support or protection.

The right structure depends on the person you're providing for, the assets available, and what you want to achieve.

Reality check your plan

This is one of those areas where the practical details really matter.

You might have a lovely idea of your adult child living in your home forever, for example.

• But what happens when the roof needs replacing?

• Who pays the rates?

• Who pays for insurance?

• What happens if your child gets married?

• What if they want to move somewhere else?

• What if they need supported accommodation?

• What if the home needs to be sold to fund their care?

• What if the person you're providing for dies before you?

These aren't the most fun questions to think about, but they're important questions to answer when you're creating the plan.

There is little point creating a detailed arrangement that looks great on paper but doesn't work in real life.

Your home isn't the only consideration

If someone relies on you for accommodation, your estate plan needs to consider their broader circumstances, too.

For example, they might have:

• an ongoing need for financial support;

• disability or additional care needs;

• limited capacity to manage money;

• a partner or children of their own;

• other assets or income;

• particular accommodation needs; or

• a risk that receiving assets outright could create problems for them.

The way you provide for them may need to take those circumstances into account.

Get advice before you decide

There are lots of ways to provide for someone who lives with you, and the best option depends on your circumstances.

Your home may be one of your biggest assets, and providing someone with a right to live there can have consequences for the other people who benefit from your estate.

That's why this is something to work through as part of your overall estate plan. We'll look at your family circumstances, your assets, the person you're providing for, and what you want to achieve. Then we can talk through the available options and, importantly, reality test how those options would work in practice.

Someone else living in your house? Make sure they're included in the conversation when you're planning your estate.