This is an age old question involving a very complex area of law. In general, you have a legal responsibility to provide for your adult children as well as your partner.

Your legal responsibilities to your partner are mainly determined by the Property (Relationships) Act 1976 (the PRA). Your partner has certain rights to your property under the PRA and these rights continue beyond death. As your relationship has surpassed the 3 years mark, the equal division rule applies. That means that should your relationship with her end (either by death or otherwise), there is an assumption of equal sharing of all relationship property, which includes your family home (even if it was acquired by you before the relationship began). This equal sharing does not apply to what is known as separate property, for example an inheritance from your parents.

Upon your death, your surviving partner will be given the right to choose to inherit your property either under the PRA (also known as Option A) or your Will (also known as Option B). If your partner chooses Option A, then she will inherit half of your relationship property. If she chooses Option B, she will take whatever property you leave her under your Will. You need to be aware that if she chooses Option A, she would take priority over any person with an interest under your Will and any other claims made against your estate – this priority would include your children.

As mentioned above, you also may have a legal responsibility to provide for your children. This responsibility stems from the principle that a parent has a moral duty to provide maintenance and support for their children. This moral duty is noted in the Family Protection Act 1955 (the FPA). Accordingly, if your children feel that you have not adequately provided for them in your Will, they can make a claim against your estate under the FPA.

What is regarded as adequate is dependent on your particular circumstances. When deciding whether proper maintenance and support have been provided, courts consider the size of your estate, estrangement, financial and other support given to the children during their lifetimes and your children’s financial circumstances amongst other things. How much a child receives from a parent’s estate is at the Judge’s discretion and turns on the unique facts of each case. As a very rough generalisation, recently the courts have been awarding around 10% of the estate to adult children who are self supporting and well off, in recognition of the importance of the family bond.

Bearing in mind the points raised above, when undertaking an estate planning exercise, we suggest you consider:

1. What you would like to specifically leave your partner and your children. A reminder: while you do not have to leave anything to your adult children who are financially stable and are self sufficient, it is recommended that you provide them with at least something in your Will due to the FPA.
2. Clarifying which items of property would be considered relationship property and which items of property would be considered your separate property. Remember, relationship property is not just any property which you and your partner jointly owned. It also includes property which was originally owned by one party but has been used during the course of the relationship for the couple’s mutual benefit, for example, the inherited beach house.
3. Putting in place a Property Relationship Agreement. It is thoroughly recommended that if you have any property that you would like to ensure remains your separate property despite it being used for your relationship with your partner, a Property Relationship Agreement should be signed. Having a Property Relationship Agreement clearly sets out what is your separate property and can therefore be left to your children. If the Property Relationship Agreement applies on death, it contracts you and your partner out of the provisions of the PRA.
4. Setting up a Family Trust to safe-guard your separate property for the benefit of your children. Note that if a Trust is created during the course of a relationship, the courts may see the Trust as a vehicle to defeat your partner’s claims/entitlements to your property under the PRA. If a Trust is created during your relationship, it is wise to also enter into a Property Relationship Agreement with your partner to clarify that the assets that are being put into the Trust are your separate property.

The balancing of obligations to your partner and your children is difficult. We highly recommend consulting a legal adviser when undertaking such an exercise.

Please contact Rebecca Stevenson at our city office if you think relationship property may be relevant to you.