With divorce rates on the uptick according to the Australian Bureau of Statistics, it’s no surprise that today’s families can be a mix of biological and non-biological parents and children, step-parents, step-children, half-siblings and even grandparents.
Where does that leave the assortment of beneficiaries when spouses and partners pass away? And how can you ensure as a parent or step-parent that your estate will be passed on fairly and equitably amongst the people you care for?
Most people don’t realise that once they die, their surviving partner can do what they like with any assets they are left, especially if everything is left to them, as is common in most wills.
Sadly, one of the most common situations we see is where children from a first marriage miss out when assets are divided. A classic example is when people get older and require aged care facilities. Often the only alternative is to sell the family home to finance the move. As the home is often a core estate asset, selling it has the potential to rob future beneficiaries such as step-children, or children from a previous relationship, of a vital share of an asset when the surviving spouse passes away.
The same goes for physical or financial gifts, which can be lost, sold, or even destroyed long before they get to the intended beneficiaries.
There are a number of ways that can help will makers in blended families achieve what they intended for their beneficiaries and avoid expensive family conflicts at the same time. There are several strategies and we’ve highlighted ten:
Be aware that different rules apply in different states. For example, in South Australia, a beneficiary can apply to the Supreme Court if they have missed out on an asset or its proceeds, while in NSW and Victoria, they still have an interest if it’s managed by the will makers’ enduring attorney or financial manager.