When Mike Brady widowed with 3 sons (Greg, Peter and Bobby) and Carol Martin with her 3 daughters (Marcia, Jan and Cindy) married for a second time they became a 1970’s reality TV series of a blended family. Second marriages with stepchildren always raises issues which need careful consideration when drafting testamentary documents.
The will maker must adjust the needs of their second partner against the needs of the children from their first marriage. When each partner brings relatively equally value assets to the marriage then pooling assets to share equally among all the children is a ready solution.
However, when asset equality does not exist there can be problems.
The problems will be further complicated when the first becomes mentally frail , or dies; they have children by their second marriage, the surviving partner remarries a third time.
There is no right way to distribute your estate when you’re part of a blended family. If you decide to leave unequal shares to children and step-children, be sure to include a statement of why this is being done in your Will or as a separate document. A surviving partner can receive a life interest in the deceased partners assets, and, on their subsequent death (or remarriage), those assets can be directed to their own children (not their step children).
This becomes tricky if the surviving spouse is not comfortable with a life interest situation and decides to challenge it in Court.
The Willmaker should provide in their Will for accommodation, an income and a nest egg for their surviving spouse.
The provision should increase to reflect a longer duration of the subsequent marriage. Mutual Wills can be used as a binding agreement to prevent a surviving spouse from changing their Will.
When planning how to distribute your superannuation, ensure that you have a binding nomination so that it can be paid as you wish − if you do not have a binding nomination it may be paid by the Superannuation Trustee to a dependant partner, your children or both in proportions decided by the Trustee and that may not be what you want.
The take home messages are to talk frankly to your family about your Will and choose your executor wisely. It is also important to review your Will and binding death nominations regularly.
If you’re part of a blended family, or if you’re wondering how to best provide for your family in your Will, contact our Wills & Estates legal team for advice and assistance.
ASIC : DIVORCE AND SEPARATION CHECKLIST
MoneySmart as part of ASIC’s literacy campaign has launched in September 2016 a Divorce and Separation Checklist and the Asset Stocktake Calculator help Australians manage their finances and make informed financial choices to avoid financial pitfalls during periods of significant change in their life.
The guide assists with:
– Making informed financial decision at the time of a relationship breakdown;
– Separating finances and getting money on track post separation and divorce; and
– Commencing the property settlement process by providing a summary of assets and debts. divorce and separation resource guide to support financial decisions checklist of practical steps to follow when relationships have broken down.
The guide can be accessed at ASIC’s MoneySmart website https://www.moneysmart.gov.au/