What are blended families?
The study into marriages in 2017 show that 19.1% of all the brides and 20.7% of the grooms had been married before.
This shows that a significant proportion of Australian families might fall into the category of “blended families”, which is a family where parents have a child or children from previous relationships.
While it is important for every adult to have a Will, this is an even more pressing for adults in blended families.
I am a mother/father in a blended family, what will happen if I die without a Will?
If you die without a legal Will, the distribution of your assets or your “estate” is determined by the provisions of the Administration of Probate Act 1919. For more general information, please refer to our blog post What happens if you die without a Will.
If you are a blended family and the South Australian Act applies, the law dictates that any assets you own will be divided between your children (adopted and biological) and your spouse in accordance with the Act.
Estate planning for blended families scenario using "Yours Mine and Ours"
Let’s look at the case of Frank Beardsley and Helen North from the movie “Yours, Mine and Ours” and pretend that Frank and Helen are now residents of South Australia. Frank has 8 kids from his previous marriage. Helen has 8 kids (four biological and six adopted).
If Helen dies leaving an estate of, say, $2.1M (because she is a successful handbag designer), the law dictates that the $2.1M will be divided as follows:
- Frank will get the first $100,000 and 50% of the balance thereof:
$100,000 + $1,000,000 = $1,100,000
- Ten of Helen’s children will share the balance $1,000,000 and get $100,000 each.
If Frank and Helen are only married for a week at the date of Helen’s death, it does not matter. Frank still gets $1,100,000 under the Act. Of course, Helen’s children might be able to issue a claim pursuant to the Inheritance Family Provisions Act, but that is a separate case all together.
Dividing assets in a blended family
What if after getting married, Frank and Helen decide to buy a house, in joint names? A lovely property up in the hill big enough to house all 18 of their children?
Helen puts in $1.7M to buy this lovely home together with Frank. She has $300,000 left in her bank accounts and that’s all she has left. A week after they move in, Helen dies without a Will, what will happen to her assets?
- The house is in joint name so the property is now legally owned by Frank under the law of survivorship.
- Helen’s estate will only consist of the $300,000 that she has in her bank accounts at the date of death.
- Frank will get the first $100,000 plus 50% of the balance thereof:
$100,000 + $100,000 = $200,000
- Helen’s 10 children will share the remaining $100,000 equally and get $10,000 each.
Dying without a Will in blended families
What if Frank dies 1 year after Helen’s death without making a Will (or without updating his Will which he had prepared before marrying Helen)? Frank never re-partners.
His estate will be distributed equally between his eight children. His estate will consist of the house that Frank and Helen bought together, as well as anything else that Frank might have. Helen’s children will not be entitled to anything from Frank’s estate, and neither will they be able to bring a claim under the Inheritance Claim (Family Provisions) Act, because step-children are not eligible claimants under that Act.
If you are in a blended family, you need to have a Will
You might not have 10 children, you might not have $2M worth of assets but the same rules still apply.
To quote Benjamin Franklin, “if you fail to plan, you plan to fail”. Failure in this case could mean significant economic loss to your children and the fractured relationships that will inevitably result in estate disputes.
The number of blended families in our community will continue to increase. If you are about to embark on a blended family adventure like "Yours Mine and Ours", one of the most loving things that you could do for your soon-to-be-new-spouse and your children, is to make a legally valid Will before walking down that aisle.