Mid Mountains Legal Blog

Considerations when making a will in a blended family

Anthony Steel

Wills for blended families can be complex, but effective legal mechanisms exist to ensure that the deceased’s assets are divided according to their wishes.

When a parent of a blended family creates their will, in addition to discussions about tax and pension consequences, a more complex family structure may give rise to additional considerations.

Why is creating a will as a blended family more complex?

Even if not immediately apparent, the potential for future conflict between surviving spouses and their biological and step-children may emerge. Fortunately, there are many ways to ensure that the deceased’s wishes are honoured, even if other family members want to use the estate’s assets in other ways.

A ‘traditional’ will (where the entire estate is left to the surviving spouse) may be unsuitable for blended families, especially if there are additional beneficiaries such as step-children from prior or future relationships.

For example, a surviving spouse who has inherited the entirety of their deceased partner’s estate could disregard their wishes to provide for all the children in the family unit equally. The surviving spouse may instead pass on the assets to their biological children.

How can I ensure my assets are divided how I wish?

To reduce the likelihood of issues arising and ensure that your assets are divided in the way you wish, a spouse in a blended family should consider structures such as trusts, mutual wills and binding family agreements.

Discretionary testamentary trusts

You can use discretionary testamentary trusts to ensure that the estate assets are divided in the way you intended. For example, you could give a life interest in the estate to the surviving spouse. On their death, the remainder of the estate passes to the children. You can create more than one testamentary trust if you want to govern the use and benefit of specific investments or assets separately from one another.

Mutual wills

A mutual will requires both parties to make any changes in writing. This ensures that the surviving spouse cannot change the estate beneficiaries or the proportion of the estate they will inherit. The obligations under the agreement remain valid even if the surviving spouse remarries or the will is terminated.

Binding financial agreements

In the event of a breakdown in a relationship, even where there is no blended family, you can take steps to ensure a specific division of assets. A binding family agreement can be made before, during or after a relationship breakdown, and should mirror the will of each spouse.

Binding or non-binding nomination forms

Binding or non-binding nomination forms for superannuation, life insurance policies and insurance bonds ensure that specific beneficiaries receive money from the estate. Binding or non-binding nomination forms allow you to nominate a specific beneficiary or group of beneficiaries. If naming a group of beneficiaries, you should carefully specify and name the group to ensure that the gift does not fail due to uncertainty.

Additional considerations

Other considerations when making a will as a blended family include distribution of family heirlooms,  what happens when assets are held separately, and child support obligations.

Distribution of family heirlooms

When making a will as a blended family, consider how specific assets such as family heirlooms will be distributed. These assets should be individually mentioned in the will to avoid conflicts between potential beneficiaries.

Assets held separately

Parents of blended families may prefer to hold assets such as bank accounts and houses in separate (as opposed to joint) names. If a property is held between spouses as joint tenants (rather than being held separately in a fixed proportion), a right of survivorship operates. On the death of one of the spouses, despite any provisions made in the deceased’s will, the property automatically passes to the surviving joint tenant.

Child support obligations

Parents in blended families should also keep in mind other financial obligations they may owe children and partners of previous relationships under child support or spousal maintenance orders.

Where to now?

Contact us if you need advice or assistance in making a will as part of blended family.

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