Making a will can often be a complicated exercise. This is especially so if you are in a blended family. A ‘blended family’ is a family in which at least one of the parties to a marriage (or de facto relationship) have children from a prior relationship. These family structures can pose significant difficulties for a will maker. If you are in a blended family, the following are five important matters that you should consider when making a will.
1. Providing for your new partner
Most will makers want to provide first and foremost for their partner in the event of their death. However, you should consider what sort of provision should be made for your partner with reference to their specific needs and the size of your estate. Do they need somewhere to live or do they already own a residence? Are they financially dependent on you or do they have enough money to support themselves? Are they likely to remarry or find a new partner if you died? The answers to these important questions (and others) will largely dictate your estate plan.
2. Preserving an inheritance for your children
If you left everything you owned to your new partner, there is no guarantee that your children will receive anything from that partner when he or she dies. For example, your partner could remarry someone else and leave everything to their new spouse when they die. Or, your partner and your children may become estranged after you die and your partner could exclude your children from their will.
In light of this risk, you need to consider what mechanisms you can put in place to ensure that, while your new partner is provided for, your children will also receive an inheritance (either immediately or eventually). Again, this will depend largely on the size of your estate and the needs of each party.
3. Family Provision Applications
A significant percentage of challenges to wills arise from blended families. A ‘family provision application’ is an application to the Supreme Court for an inheritance (or additional inheritance) from an estate. This could be brought by either your new partner or your children if they were not satisfied with their inheritance from you (or lack thereof). Whether your new partner or your children would succeed in making such an application is a different question. However, the significant legal costs involved in these kinds of court applications is enough to warrant you trying to avoid them where possible.
4. Superannuation and life insurance
Superannuation (and any associated life insurance) will not automatically form part of your estate. This means that you have to separately nominate a beneficiary to receive your superannuation. If you do not make this nomination by way of a ‘binding death benefit nomination’, then regardless of what your wills says, your superannuation fund could decide to pay your superannuation to someone you don’t want to receive it. For example, you may want all of your estate to pass to your children under your will but, absent a binding nomination to the contrary, your superannuation fund may decide to instead pay all of your superannuation to your new partner. This can be all the more important in cases where superannuation is a large portion of your estate plan.
5. Joint Assets
Similar to the last point, you should also consider what assets you own jointly with your new partner. In particular, if you owned any real estate with your new partner as joint tenants (as opposed to tenants in common), then that asset will automatically pass to your new partner on your death regardless of what your will says. The same result would happen with any joint bank accounts. If you didn’t want these joint assets to pass to your new partner, then you would need to consider what steps you can take to ensure the asset passes to your preferred beneficiaries.
As experienced estate planning lawyers, we have developed strategies and options for blended families to address all of the above matters and balance the competing interests. If you are in a blended family and require assistance with making a will, we invite you to contact us on (02) 9101 7000 or visit our website to get started online.