What are the top 5 issues facing blended or stepfamilies in regard to estate planning?
According to the project on “Family Trends & Transitions” published by Australian Government, Australian Institute of Family Studies in August 2023, families were described as couple-parent or one-parent families. Within couple-parent families, there are different types of families such as intact families, stepfamilies or blended families. The Australian Bureau of Statistics defines a blended family as a couple family with at least one natural or adopted child of both partners and at least one step-child of either partner. A step-family is defined as a couple family with at least one step-child of either partner in the couple and without any natural or adopted children of both partners. This can create difficult estate planning considerations for blended or stepfamilies.
As at the 2021 Census, 12% of couple families with dependent children were either step or blended families. There were:
- 182,229 stepfamilies, representing 8% of couple families with dependent children
- 99,564 blended families, accounting for 4% of couple families with dependent children.
There are couple families with non-dependent children who are either step or blended families.
In these families, there are often competing interests between a surviving partner and children from previous relationships. It can be challenging for the willmaker to try and balance those interests in a way that satisfies everybody. Below are the top 5 common issues for blended or stepfamilies when considering an estate plan:
- If the wills give the whole of their estate to their partner with gift over to the children of each partner, what might happen after the death of the first partner?
- A partner may have brought in their own assets to the new relationship and wish to ultimately benefit their children from previous relationship. How can you achieve this while balancing the future needs of your current partner and your non-dependent children?
- Who has your power of attorney and guardianship if you lose capacity to make decisions about your financial matters and personal self?
- What is to happen to the super death benefit on your death?
- Could a stepchild living in your household make a claim on your estate if you do not provide for them in your will?
There are many other estate planning concerns for blended or stepfamilies to consider. A carefully prepared estate plan is essential to ensure that on your death your assets are distributed as you wish. Constant changes to the law and or your personal circumstances make it crucial to have an updated estate plan. If you wish to make an appointment to discuss any of the above matters, please contact Adelaide Ryan on 02 9291 7122.
