There is more than one way to build a family, and speaking to experienced Will and Estate lawyers to find an expert to help you protect yours is a must. A standard Will isn’t up to the task for the many blended families in Australia. Not only is your superannuation separate from a standard Will, but blended families come with a range of potential claimants to consider. The best way to keep your family in harmony is to make them aware of your estate planning. Otherwise, you run the risk of a Will dispute.

Blended Family: Why you need a tailored estate plan

What is a blended family? If you have children from a prior relationship and build a home with a new partner, you’re a blended family. Whether they live with you part-time, full-time, or you have a dozen step-children, you have to consider how that alters your ideas around estate planning. You have to think about potential guardianship if there are minor children, joint ownership situations, trusts, companies, life insurance, and who benefits, family provision claims, superannuation, and a Will and Estate lawyer can keep you on track. 

New South Wales follows the concept of notional estate, known as clawback risk, which allows someone challenging a will to potentially access assets held elsewhere. For example, if someone is successful in challenging a Will, things like superannuation could be lumped in with the rest of the estate. While this potentially overrides someone’s dying wishes, its purpose is to prevent people from moving assets before their death in a bid to avoid a will estate dispute.

The Top 5 Issues 

Issue 1: Will Challenges and Competing Claims

Under the Succession Act 2006 NSW, eligible persons are allowed to apply for additional provisions if the Will did not adequately provide for them. Eligible persons include spouse (or de facto partner), children (which includes adoptees), grandchildren, and ex-spouse (or de facto partner). 

The best approach is to factor all eligible people into your Estate and Will planning and ensure that you have addressed their needs adequately. You could also consider testamentary trusts or discuss inter vitro gifts and loans with your lawyer. You may happily loan or gift money to your children, but you should create a paper trail to protect both of you. 

Issue 2: Life Insurance and Superannuation

Your superannuation doesn’t automatically become part of your Estate. Instead, it will be paid out to your binding death benefit nomination, and eligible nominations include your spouse or de factor partner, children, or financial dependents. You can also opt to make it part of your estate.

What you must do is ensure your current binding death benefit nomination is valid, and ensure your decision aligns with your will. Likewise, you may want your life insurance beneficiary to reflect your other decisions. 

Another factor to consider is taxes. If you have adult, non-dependent children as beneficiaries, they will likely face different tax treatment so, always consult an experienced lawyer for sound legal advice. If your blended family is extra complicated, a testamentary trust may be an effective weigh to manage the distribution of assets seamlessly. 

Issue 3: Asset Structures 

If you share joint tenancy with your partner, then this remains outside the will until both partners pass. Tenants in common, however, are dictated by the estate, so it’s vital you consider fair division among the children you have from various relationships, whether biological, adopted, step, or otherwise. A family trust puts control in someone else’s hands, which is why succession planning is key. Notional estate is an NSW-specific Family Provision concept that allows for will challenges to potentially claw back assets excluded from the will. 

Now it’s time to take practical action. Take an honest look at your current structure and start reviewing titles, restructuring where necessary, updating any trust deeds, reviewing document loans, and appointer provisions. As for last-minute changes? Always take legal advice before you make changes, and always ensure there’s a paper trail. 

Issue 4: Children, Stepchildren, and Care Arrangements

If you have minor children, you should nominate a guardian (or more than one) in your Will to ensure they are protected in the event of your death. When making this decision, consider their location and the potential upset of a move while children are grieving, the age and health of your nominee, and the values they hold.

Whether stepchildren are eligible depends on the state you live in. If you want to ensure they are provided for, specify this in your Will to prevent someone from challenging or contesting a Will.

A testamentary trust is an effective way to protect minors and young adults, to stage distributions, and to protect your estate against relationship breakdowns or wasteful spending.

Your minor children will have greater needs than older children you have, whether they’re from a previous relationship or not. You must tailor your trust to cover everyone adequately. Remember, will planning isn’t something you only do once. It’s something that should be revisited after major life changes.

Issue 5: Executors, Conflicts, and Documenting Your Intentions

Selecting an executor is a tough decision, but it can be more complicated in blended families because there could be a higher risk of conflict. You don’t want to set your new spouse up for a family fail with your adult child after you’re gone. The best way to handle this is by appointing a neutral executor, and if you don’t know anyone who could remain neutral, you can choose a professional executor. 

While you can write letters of wishes for personal items or to avoid the idea of unequal gifts, there are limits. Ultimately, it isn’t legally binding. It’s simply an expression of your wishes, and the executor can decide to ignore it if your circumstances have changed between the writing of the letter and your death.  

Schedule a biennial review for your will, binding death benefit nomination, powers of attorney, etc. Alternatively, review your will the moment your circumstances change, whether it’s a new asset purchase, an asset sale, a marriage, a separation, divorce, or a new child.

Practical Protective Steps

  • Audit your assets and existing structures 
  • Ensure your will, binding death benefit nominations, and insurance beneficiaries align
  • Consider whether a testamentary trust is right for you 
  • Consider tenants in common property ownership where necessary
  • Choose a neutral, competent executor
  • Keep a paper trail of gifts and loans, and update letters of wishes
  • Avoid the need for estate litigation lawyers by sitting down with a will and estates specialist

Frequently Asked Questions

Do my step-children have the same rights to my estate as my biological children? 

It depends on the extenuating circumstances, which is why it’s so vital that you seek legal advice when creating your Will. 

Does my super automatically go to my spouse? 

Your super will go to your binding death benefit nomination.

Can my ex-partner make a claim against my estate? 

It’s possible, especially if you were providing support.

How often should I review my estate plan? 

You should review your will and estate planning after every major life event, otherwise every two years.

Call AJB Stevens

If you’ve recently lost a loved one and you feel like you’ve been treated unfairly by a family members Will, get in touch with AJB Stevens to schedule a consultation today. A member of our team will go through your case with you and discuss your options.