Estate planning for the modern family

Estate Planning

There is no such thing as a “typical” family dynamic anymore, and now days there is more to a family than the husband and wife with 2 and a half children. Today there are divorces, new marriages, de-facto relationships, stepchildren, adopted children, same sex couples and the list goes on.

When it comes to estate planning some challenges can arise when considering what someone wishes to include or not include in their Will. There are a variety of scenarios that can arise, and with this a variety of problems can occur if someone passes away without appropriate estate planning.

Examples of a “modern” or “blended family” that need special attention in estate planning include the following:

  1. One or both of the people in the relationship have children from a previous relationship;
  2. One or both of the people in the relationship have been in a previous de facto relationship or marriage;
  3. The relationship is a same sex couple;
  4. A person may not be in a relationship but has children from a previous relationship;
  5. A person may not be in a relationship but has been in a de facto relationship or marriage; and
  6. A person may identify as transgender.

It is common for an individual or couple to fit into multiple of the above categories, and sometimes these scenarios lead to a risk that an estate is open to a “Family Provision Claim.”

A Family Provision Claim is an application to the Supreme court of NSW that a person makes to receive a share or a larger share of the deceased persons estate. This is an extremely stressful and expensive process that a deceased person does not want their loved ones to go through after they pass away.

If an individual had a blended family or fits into the category of a modern family, and they want to reduce the risk of someone making a claim against their estate, it is important that they balance the interests of the important people in their life.

To minimise the risk of a Family Provision Claim we often provide advice on the following options:

1. Making provision for all possible claimants (this is sometimes not possible if the estate is not large enough);

2. Creating a Right of Residence in the will, this often provides a benefit to the “current spouse” of living in the family home;

This allows someone to leave their share of the family home to their children, whilst allowing the current spouse to remain living in the property, until they pass away or some other specified period passes;

3. Preparing a mutual will agreement with the current spouse, which can help ensure a person’s children from a previous relationship are looked after.

A Mutual will is a contract that two people enter into at the time they prepare their wills. It outlines the specific clauses that the parties agree that they will not change or alter after one of the parties passes away.

Blended families and modern estate planning is a complex area of law. It is important that you receive thorough legal advice, and your will is well drafted in a way that clearly reflects your intentions. If you have any questions, please contact one of our experienced estate planning solicitors on 02 4944 3322.

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