When a marriage or de facto relationship involves children from previous relationships, estate planning can become a delicate matter. To navigate this process of estate planning for blended families successfully, it is important to consider the unique factors that come into play.
Regularly update your will
A comprehensive and up-to-date will forms the foundation of estate planning. Reviewing your will regularly is even more important in blended families as life events such as remarriage, divorce, birth, or death are likely to impact your estate planning decisions. By keeping your will current, you can ensure that your assets are distributed according to your wishes while taking into account the changing dynamics within your family.
Address stepchildren’s rights and inheritance
In Australia, stepchildren do not automatically possess a legal right to inherit from their stepparent’s estate. If you wish to provide for your stepchildren, you will need to include them explicitly in your will or establish trusts. By doing so, you can extend your care and support to these important members of your blended family.
Consider how to treat the family home
Balancing the need to ensure that your spouse can continue to live in your home after you pass away, with the desire to have your children from a previous relationship ultimately benefit from the home’s value is a common problem for blended families. Including appropriate provisions in your will to cover your wishes will ensure that all family members are treated fairly.
Consider testamentary trusts for blended families
Testamentary trusts can be an invaluable tool for estate planning in blended families. Crafted within a will and activated upon the willmaker’s passing, testamentary trusts offer flexibility and control over asset distribution. They enable you to provide for your spouse and children from previous relationships, safeguard assets, and manage potential conflicts.
Evaluate superannuation and life insurance policies
Superannuation and life insurance policies often constitute significant assets within an estate. It is essential to regularly review and update beneficiary nominations to ensure that your blended family is adequately provided for. Collaborate with your financial advisor and estate planning lawyer to align these policies with your overall estate planning goals.
Open communication and mediation
Encouraging open and honest discussions with your spouse, children, and other family members is vital during the estate planning process. By communicating your intentions and addressing any concerns or potential conflicts, you can help minimise misunderstandings and reduce the likelihood of disputes after your passing. If necessary, consider engaging the services of a mediator to facilitate constructive conversations, ensuring that all family members feel heard and valued.
Estate planning for blended families in Australia requires a unique approach. Working with an experienced estate planning lawyer who understands the delicate dynamics at play, will give you confidence in your wishes for your blended family.
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Written by APS Wills & Estates Principal Lawyer Phillip Lambourne
Phil is a lawyer with over 35 years of experience in private practice and over 25 years of experience in the trusts and estate planning area. As Principal Lawyer with APS Wills & Estates, Phil provides advice and prepares documentation in the areas of Wills, Powers of Attorney, Probate and Estate Administration for clients across Australia. He also provides clients with conveyancing and property law, commercial law and state tax advice services.
When Phil isn’t working, he enjoys spending time with family, reading new books, and watching new shows with some good scotch whisky, red wine and cheese. Phil also enjoys playing trombone in the Melbourne Lawyers Big Band!