Estate Planning for Blended Families
Blended families are increasingly becoming the norm in society.
When we talk about blended families it can apply to a couple where they each have a child or children from a previous relationship and potentially also a child or children together. It can also apply to a couple where only one has a child or children from a previous relationship.
Blended families can create challenges from an estate planning perspective particularly where a person wants to provide for their partner and also for their own children.
Unfortunately, too often do we hear stories of where the new partner has inherited all of the deceased person’s assets leaving the deceased’s children from a previously relationship without anything.
There are many ways to avoid such situation whilst also still providing for the new partner and children.
Some of the strategies that can be implemented include but are not limited to:
Ownership of property
Reviewing the ownership of a joint property. Most often couples own joint property as “joint tenants” which mean it passes to the survivor upon the death of the first person. Sometimes couples choose to alter the ownership to “tenants in common in equal shares” so that each person can transfer their 50% under their own Will as they see fit.
Right of occupancy
Providing for a right of occupancy in a property as opposed to gifting the ownership of a property to your partner. This allows your partner to live in the property either for the rest of their life or for a specified time, and after such time the property can pass your nominated beneficiaries (i.e. children).
Providing a life interest in your estate to your partner which vests in your nominated beneficiaries (i.e. children) upon your partner’s death.
Capital Protected Testamentary Trust
Establishing a Capital Protected Testamentary Trust under your Will allowing your partner to receive the benefit of the income from your estate but all of your capital (the assets) are protected for your children.
- Superannuation nomination outside of your Will
Nominating your partner and/or children by way of a binding death benefit nomination to receive your superannuation upon your passing in such percentages as you see fit. We note that this requires a superannuation form to be completed and is external to your Will.
Whilst the above are only some of a range of strategies available to provide protection for partner and your children in a blended family, it is always important to obtain tailored advice to your particular circumstances.
We also find that the best estate plans for blended families are those where the couple have sought legal advice together.
Should you require any assistance in putting in place an estate plan for a blended family please do not hesitate to contact us on 9523 5535.
Related Links: Challenging a Will with a Family Provisions Claim
Disclaimer: The information contained in this article is provided as general information only. It is not intended to be legal advice and it should not be used or relied on as legal or professional advice.