Making a Will is important, but even more so if you are part of a blended family. A blended family is a family in which one or both spouses have a child or children from a previous relationship. Careful estate planning will ensure that all your intended beneficiaries are provided for upon your death, and that the potential for conflict within the family is minimised.

There is no one-fit solution when it comes to estate planning for a blended family. The dynamics and needs within families evolve, and personal assets may change from year to year.  However, an effective estate plan may be accomplished by identifying the potential issues that may arise within each family unit and considering options to address these issues.

The important thing is to discuss your circumstances and objectives with a lawyer at TLS, so that your wishes can be properly set out in your Will. Your Will should be reviewed regularly to take account of your changing circumstances.

Competing interests – the common issue

A typical issue faced by a Willmaker within a blended family are the competing interests of past and present spouses, biological children and stepchildren. A Willmaker is likely to want to look after their present spouse and their biological children from a previous relationship. However, there may also be children of the present relationship and children from the spouse’s previous relationship to consider.

Traditionally, a Will for a married couple may specify the estate to go to the surviving spouse in the first instance, and then upon the death of the surviving spouse, to the children. This may not be ideal for blended families because not only must the children of the deceased wait until the stepparent dies before inheriting, but there is a risk that the stepparent may change their Will so that the deceased’s children miss out.  A further risk is that the assets may diminish over time with use by the stepparent, leaving little for the deceased’s children.

In some instances, if adequate provision is not made from a deceased estate, an eligible beneficiary, such as a spouse, child, or stepchild in limited circumstances, may be able to make a claim under the Family Provision Act 1972 (WA), which may cause distress, delay and uncertainty during an already difficult time.

You may wish to consider the following:

Choosing your executor

Your executor is your legal personal representative upon your death. Their role is to call in your assets, pay your debts and expenses, and ensure that your estate is distributed in accordance with your wishes in your Will.

Normally, a person’s spouse or child will be nominated for this role. However, due to the complex dynamics involved in blended families, it may be preferable to appoint somebody more ‘neutral’ such as a professional so that the role may be carried out with impartiality.

Immediate gifts and interests in real estate

When making your Will, you may choose to provide an immediate gift to your children upon your death, rather than your children waiting to inherit after the death of your spouse, e.g. their stepparent.  This will safeguard against the possibility of your children missing out on an inheritance should your partner later change their Will or your estate assets diminish.

If you and your partner hold real estate as joint tenants, you may consider changing this to a tenancy in common.  A joint tenancy means that property held by a deceased tenant automatically passes to the surviving tenant, therefore the property cannot be gifted in the deceased tenant’s Will.  However, if the property is held as tenants in common, your share of the property may be left to your children in your Will, subject to leaving your partner a life interest in that property.

Generally, a life interest will provide your spouse a continued right to reside in and use the property until he/she dies, at which stage your share in the property will revert to your children.  However, it should be noted that life interests may be complex due to circumstances such as health and aging of the surviving spouse who may need to downsize or move to an aged care facility.  These issues should be carefully considered and discussed with your lawyer at TLS.

Testamentary trusts

A testamentary trust is a trust contained in a Will that comes into effect upon the Willmaker’s death. A testamentary discretionary trust provides flexibility in asset distribution amongst beneficiaries as the trustee may distribute to primary beneficiaries or a wider class of general beneficiaries, which may preserve the asset for future generations.

Conclusion

When considering estate planning for your blended family, it is important to remember the following:

• Talk to your spouse about your estate planning objectives.
• Consider everybody from the family including spouses, previous spouses, biological children and stepchildren, and identify who you wish to benefit from your estate – preparing a family tree may be helpful.
• Contemplate if your choice of beneficiaries may leave open the potential for a Family Provision Act claim
• Choose impartial executors.
• List all assets including those held separately and jointly.
• Review your Will regularly, and immediately if your personal, health or financial circumstances significantly change.

This is general information only and you should obtain professional advice relevant to your circumstances.

When you’re ready to make your Will, change your Will, or even if you’re just looking for advice, our online Estate Planning assistant is the best, first step.

Or, if you or someone you know wants more information or needs help or advice, please call 6383 5551 or email re*******@*ls.law.