Blended Families and Wills
If you are in a second or subsequent marriage or de facto relationship that involves different sets of children, then you have a blended family. This means you have special needs and added complexities when it comes to your Wills that must be considered carefully.
Common Problem Areas
Willmakers forget how assets are held. Without intending it, assets can automatically pass to a joint owner or nominated beneficiary, and not form part of the estate of the deceased person, thus frustrating any Will provision intended to deal with that asset. For example, assets that you control (rather than own), such as your self managed superannuation, needs to be carefully considered.
Before you buy a home with your second spouse or partner, you need to decide how your interest in that property will be allocated upon your death. Do you want your new spouse to inherit the property in its entirety (even if they didn’t contribute much towards its purchase), or do you want to pass it on to your children?
Providing for a surviving spouse or partner, where the Willmaker 'trusts' that person to look afterthe children of prior relationships, not just that survivor’s own children, can be a problematic approach, and often leads conflict between the children of the deceased and the beneficiary.
Failure to recognise that natural children may only have one chance of making an estate claim, forcing the issue even where there is an excellent relationship between the surviving spouse and those children.
Failure to see the practical difference between giving “use” of assets to a surviving spouse during their lifetime (and then passing on those assets to the Willmaker’s natural children), as opposed to an outright gift of those assets (hoping that the surviving spouse will pass assets on to those natural children through that survivor’s Will) can leads to problems unless the relevant provisions are carefully drafted.
Failure to deal equitably with adult children of an earlier marriage, and younger children of a current relationship, thereby creating dissent between the two groups.
What can be done?
Careful Will planning is essential, with the recognition of the present and future needs of all family members.
Planning succession in a way that protects the children of a previous relationship, but without showing “distrust” in a new partner.
Arranging a Will maker’s affairs so the needs of each beneficiary are satisfied in the most tax effective way possible.
Using successful Estate Planning Will strategies to ensure fairness, such as the gifting of superannuation benefits, funding of life insurance or gifting a life estate or right of occupancy in the matrimonial home.
What is the objective?
The objective for blended family Willmakers should be to ensure a fair and tax effective division of assets in a manner that takes into account the Will maker’s legal obligations yet gives security to all parties, and minimises the potential for extremely damaging and expensive conflict between loved ones.
Blended families are increasingly common, and account for an increasing amount of estate litigation. Disappointed beneficiaries are more than ever prepared to litigate to claim what they consider to be their rightful share of an estate. If you fail to plan, you really are planning to fail – but it will be your loved ones who suffer the pain and bear the enormous costs of trying to repair your mistakes.
Considering that as there are over a dozen different complex laws and legal regimes that can impact on the distribution of your estate, estate planning is very much a specialised area of law requiring an experienced estate planning solicitor. As with most services in life, the old rule still applies “If you pay peanuts, you’ll most likely get monkeys”.
Are you ready to take the next step?
Initial Will consultations are complimentary. At the end of the initial consultation, RetireLaw solicitors Terry Purcell and Dawn Wong provide clients with tailored recommendations based on their circumstances and legal needs, along with a lump sum quote to consider. There is noto proceed.
RetireLaw offers customised service and advice from experienced estate planning solicitors understand the diversity of real families and the fear of being slugged with hidden legal fees.
Do not hesitate to call Terry Purcell or Dawn Wong today should you have any questions about Wills or if you would like a complimentary review done of your current Will and associated documents.