Estate Planning for Blended Families

What is a blended family?

A family is considered blended when one or both parents have children from a previous relationship. The parents may be married to each other or in a de facto relationship – and may or may not also have children together.

What the main risks are in a blended family scenario?

That the Will of the surviving party (made during the relationship) is later revoked, either through a subsequent marriage or by the surviving party making a new Will which benefits their own children and excludes the stepchildren.

What are some beneficial estate planning strategies that may be available to blended families?

1. Mutual Will Agreements
2. Life Interest
3. Testamentary Trust Wills
4. Use of life insurance and superannuation death benefits

Why is estate planning so important in a blended family scenario?

Blended families often have complex asset structures, including assets brought into the relationship and those acquired during the marriage or partnership. It’s crucial to clearly define ownership rights, especially for assets intended to provide for children from previous relationships.

Common circumstances where Family Provision Claim (‘FPC’) are made against a deceased person’s estate:

1. The children of a previous relationship are excluded from a Will (or do not receive enough provision) and the estate, or a significant share of the estate, is left to a second spouse or partner;
2. Children of a previous relationship receive the entire estate (or a significant share of the estate) and the surviving spouse or partner receives nothing or not enough; and
3. Children of a second relationship are provided for in a Will (i.e. where the other parent has died), but no provision or not enough provision is made for the children of a previous relationship.