When you leave property directly to your spouse in your will, it becomes theirs to do with as they wish. If your spouse later makes their own will, they could leave that property to anyone — a new partner, their own children from a previous relationship, or other family members. For many people, especially those in blended families, this is a genuine concern.
The good news is that Nova Scotia estate law provides tools that let you provide for your spouse during their lifetime while ensuring the property ultimately passes to your own family when your spouse dies. Two of the most common are the life interest and the testamentary trust.
The Problem with Outright Gifts
When you leave property to someone outright in your will, they receive full ownership. They can sell it, spend it, or leave it to anyone they choose in their own will. If you leave your home to your spouse outright, and your spouse later remarries, they could leave that home to their new partner or to children from a previous relationship. Your children might receive nothing.
This is not a rare scenario. It is one of the most common sources of conflict in blended families, and it is entirely preventable with proper estate planning.
Life Interests
A life interest is one of the simplest and most effective tools for this situation. When you create a life interest in your will, you give your spouse the right to use and enjoy your property for their lifetime, but you name a remainder beneficiary — typically your children — who will receive the property when your spouse dies.
For example, you could give your spouse the right to live in your home for as long as they live. They cannot sell the home or mortgage it. When they pass away, the home goes to your children. Your spouse is provided for during their lifetime, but the property stays in your family.
Life interests can apply to types of property besides real estate. You could give your spouse a life interest in the income from your investments, with the capital passing to your children when your spouse dies.
The main advantage of a life interest is its simplicity. The main disadvantage is its rigidity — once established, the terms cannot adapt to changing circumstances.
Testamentary Trusts
A testamentary trust offers more flexibility. Created within your will, a testamentary trust takes effect when you die. You name a trustee to hold and manage the property for your spouse's benefit during their lifetime. When your spouse dies, the remaining trust property passes to your designated beneficiaries — your children, for instance.
The key advantage of a testamentary trust is control. You can specify exactly how the trustee should manage the property, what your spouse can and cannot access, and under what circumstances the trust can make distributions. For example, you could allow the trustee to use trust income for your spouse's care and maintenance, but require that the capital be preserved for your children.
You can also give the trustee discretion to respond to changing circumstances — something a life interest cannot do. If your spouse develops health issues and needs more care, the trustee can adjust distributions accordingly, while still preserving the capital for your children.
Choosing between a life interest and a testamentary trust depends on your situation. A life interest may be sufficient if your needs are straightforward. A testamentary trust may be better if you want more control, if the property is complex, or if you want to give a trustee flexibility to respond to changing circumstances.
Right of Residence
A right of residence is a specific form of life interest that applies to the family home. It gives your spouse the right to live in the home for their lifetime, but unlike a full life interest, it does not give them the right to rent it out or otherwise derive income from it. When your spouse dies or no longer wishes to live in the home, it passes to your named beneficiaries.
This can be a good middle ground — your spouse has a secure place to live, but the property is clearly protected for your children.
Protecting Cash and Liquid Assets
Life interests and testamentary trusts are not limited to real estate. They can also protect cash — money sitting in a bank account, term deposits, or other liquid assets that you want to keep in your family.
With cash, the risk is greater than with a house. Real estate cannot be quietly sold or spent. Cash can be withdrawn, transferred, or gradually spent down over time. If you leave cash to your spouse outright, there is nothing stopping them from spending it all, leaving nothing for your children.
A life interest in cash works similarly to a life interest in a home. Your spouse receives the income or interest generated by the money during their lifetime, but the capital — the original sum — is preserved and passes to your children when your spouse dies. The difficulty is practical: controlling how liquid cash is used is harder than controlling how a house is used.
A testamentary trust is often the better choice for cash and other liquid assets. The trustee holds the funds and manages them according to your instructions. You can allow the trustee to use income for your spouse's care and living expenses, and you can decide whether the trustee may also use some of the capital if needed — for example, for medical expenses or emergencies. When your spouse dies, whatever remains passes to your children.
This gives you the same protection as a life interest, but with an important advantage: the trustee, not your spouse, controls access to the funds. Your spouse cannot spend down the capital on their own, and the money that remains stays in your family.
Important Considerations
Several factors should influence your decision.
- The Testators' Family Maintenance Act in Nova Scotia allows a spouse, children, and certain other dependents to apply to the court for reasonable provision from your estate if they believe the will does not adequately provide for them. If you give your spouse only a life interest and no outright assets, they could potentially challenge the will. The court has discretion to override the terms of your will if it finds the provision inadequate. This does not mean you cannot use life interests or trusts — it means you should consider whether the overall provision for your spouse is reasonable.
- Tax implications also matter. Life interests and testamentary trusts have specific income tax treatment that differs from outright gifts. A life interest created in a will is generally valued at the date of death, and there may be tax consequences when the property eventually passes to the remainder beneficiaries. A testamentary trust is taxed as a separate taxpayer. Professional advice is essential to understand the tax consequences before making a decision.
- Choosing a trustee is critical for a testamentary trust. The trustee has significant responsibility — managing property, making distributions, and balancing the interests of your spouse and your children. A poor trustee choice can lead to conflict and mismanagement. Consider naming someone who is trustworthy, financially responsible, and ideally independent — not someone who stands to benefit from the trust.
Blended Families
These tools are especially valuable in blended families. If you have children from a previous relationship and a current spouse, you may want to provide for your spouse but ensure your children ultimately inherit your property. A life interest or testamentary trust lets you do both — your spouse is taken care of during their lifetime, and your children receive the property when your spouse dies.
Without these tools, the property you leave to your spouse could end up with your spouse's next partner, their own children, or their family. With proper planning, you can ensure it stays in your family.
Planning Ahead
If you are concerned about keeping property in your family after your spouse's death, the right approach depends on your circumstances, your property, and your family situation. A life interest may be simple and effective. A testamentary trust may provide the control and flexibility you need. The best way to decide is to discuss your situation with a professional who can help you weigh the options and choose the right structure for your family.
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