The Spouse in the House

Tom Trustor was a 65-year-old widower with three grown sons. He lived in a house he’d bought ten years ago, after his wife died.
According to the terms of Tom’s revocable living trust, after his death, all his assets would be distributed to his three sons, share and share alike, or to their respective children.
Two years ago, Tom married Terri. She moved into Tom’s house, and provided a welcome “woman’s touch”, directing the application of some painting, upgrading and decorating.
Tom now asks, “If I die, what will happen to Terri? It’s my house, but I don’t want her kicked out. I’d like her to be able to stay there, at least for a decent period of time, if not indefinitely.”
This calls for an amendment to Tom’s trust, granting Terri the right to occupy the house, provided that she was still married to Tom and residing with him at the time of his death.
There are several variables: Depending on Tom’s wishes, the extent of his liquid assets and the respective financial conditions of Terri and of Tom’s children, the Trust amendment might provide that:
1. Terri’s right of possession would be for a fixed term, such as a year, or three years, or, instead, she could reside there until her death or her permanent vacation of the premises;
2. The costs related to the property, including but not limited to principal, interest, taxes, insurance, homeowners’ fees, gardening, maintenance, and utilities could be payable by the Trust, or in whole or in part by Terri.
3. Terri’s right of occupancy might be limited to herself, or she might be entitled to have others co-occupy the property with her (for companionship or to help with expenses).
4. When Terri’s occupancy ends, the Trustee could be directed to sell the property and distribute the sale proceeds to Tom’s children and/or to Terri, in such percentages as Tom may elect.
This isn’t a one-size-fits-all situation. Tom should discuss this matter with his attorney and accountant, and arrange for preparation of a Trust amendment which will carry out his wishes, promote security for Terri and provide predictability for all his beneficiaries.
Jerry Kessler practices law in Santa Clarita. He may be reached at 661-255-1001.