BY WEALTH ADVISER
Here is a scenario that plays out far more often than most people realise. A man remarries after a divorce. He and his new wife buy a home together as joint tenants, the way most couples do. He updates his will to leave everything to his wife, trusting that she will look after his children from his first marriage when the time comes. He dies. His wife inherits the house automatically through the right of survivorship, and the rest of his estate flows to her under the will. A few years later, she remarries — or simply updates her own will to favour her own children. His children receive nothing.
He did not intend to disinherit his children. But that is exactly what happened. This kind of accidental disinheritance is one of the most common outcomes in blended family estate planning, and it happens because well-meaning people apply traditional thinking to non-traditional family structures.
Australia’s family landscape reflects this reality. According to the 2021 Census, 12 per cent of couple families with dependent children were step or blended families — roughly 280,000 households navigating these dynamics. That figure does not capture couples who came together after their children had left home, or de facto partners with adult children from prior relationships. The planning challenges extend well beyond the census definition.
The good news is that careful planning can protect everyone. But it requires thinking differently about how your estate fits together — and being willing to have some conversations that may feel uncomfortable.
The Core Challenge: Competing Obligations
In a first-marriage family, the interests of the surviving spouse and the children are generally aligned. Leaving everything to your partner works because whatever remains will eventually pass to the children you share.
In a blended family, this alignment breaks down. You have obligations to your current partner — someone you have built a life with, who may depend on you financially — and obligations to your children from a previous relationship, who may feel anxious about being overlooked. You may also have stepchildren you consider your own, even if the law does not automatically treat them as beneficiaries.
These obligations conflict not because anyone is acting in bad faith, but because the surviving partner’s future is uncertain. They might remarry, face a property settlement under the Family Law Act, or make different decisions about their own will once you are no longer there. Your children have no legal guarantee that a good relationship with your current partner today will translate into an inheritance tomorrow.
Property Ownership: The Trap Most Couples Walk Into
For many Australian couples, the family home is their single largest asset. How that property is owned can determine whether your estate plan works — or fails completely.
Most couples hold property as joint tenants. When one owner dies, their share passes automatically to the surviving joint tenant, regardless of what the will says. For a first marriage, this is usually fine. In a blended family, it can produce the accidental disinheritance scenario described above. Your will might say your children should receive your share of the home. It does not matter. Joint tenancy overrides the will.
The alternative is tenancy in common, where each owner holds a defined share — typically 50 per cent — that they can deal with independently. As a tenant in common, you can leave your share to whomever you choose. You can direct it into a testamentary trust, grant your partner a right to live in the property for their lifetime or until they remarry, and then have your share pass to your children.
Converting from joint tenancy to tenancy in common — known as severing the joint tenancy — is usually straightforward, though the process varies by state and territory. It typically involves lodging a form with the relevant land titles office and generally does not attract stamp duty where ownership proportions remain unchanged. In most jurisdictions it can be done unilaterally, though having a transparent conversation about the change is almost always the better approach. If you are purchasing a new property with a partner and either of you has children from a previous relationship, consider tenancy in common from the outset. A related strategy is including a right of occupation or life interest in your will. This allows your surviving partner to continue living in the property — providing housing security — while ensuring your share ultimately passes to your children. The terms can specify that the right ends if your partner remarries, moves into care, or sells the property.
Wills: Why the Standard Approach Falls Short
A simple will — one that leaves everything to your spouse, or if your spouse does not survive you, to your children — is designed for a family where the spouse and the children are the same unit. In a blended family, that single pathway creates exactly the vulnerability already described. Blended families generally need wills that provide for the surviving partner and ring-fence assets for children from the previous relationship simultaneously. Several strategies can help.
One approach is to make specific bequests — an investment property, a share portfolio, or a cash amount — directly to your children, with the remainder going to your spouse. This gives your children certainty and reduces the risk of a family provision claim, while still providing for your partner.
Another approach is a testamentary trust (covered in detail in a separate article in this series). In a blended family context, a testamentary trust can hold assets for your children while allowing income to be distributed to your spouse during their lifetime. This works well for larger estates where the administration costs are justified by the tax and protection benefits.
A more direct mechanism is a mutual will arrangement — a contractual agreement that neither you nor your partner will change your will after the other dies. The idea is to lock in the agreed distribution for both sets of children. However, mutual wills are inflexible, and the surviving partner is not literally prevented from making a new will — the remedy for a breach is typically a constructive trust claim by the disadvantaged beneficiaries after the survivor’s death. They also do not prevent the surviving partner from spending or giving away assets during their lifetime. Most experienced estate planning lawyers will explore other options first.
Whichever structure you use, the will needs to be drafted by a solicitor who understands blended family dynamics. A template or DIY will is unlikely to address the layered obligations these families create.
Superannuation: The Asset Your Will Cannot Control
Superannuation sits outside your estate unless you take deliberate steps to bring it in. Your super balance is paid according to a death benefit nomination — not your will — and for many Australians, super represents one of their largest assets.
The most common blended family problem is outdated nominations. If you made a binding death benefit nomination during your first marriage and never updated it, that nomination may still direct your entire super balance to your former spouse. If your nomination has lapsed — binding nominations in many APRA-regulated funds expire after three years unless renewed, though some funds offer non-lapsing options and SMSF rules depend on the trust deed — your fund’s trustee will use their discretion to decide who receives your benefit. In a blended family with competing claims from a current partner and children from a previous relationship, that discretionary process can take considerable time and produce an outcome no one is happy with.
Some members resolve this by splitting their nomination — directing a portion to their current spouse and a portion to their children. This is practical, but requires thought about proportions and tax consequences. Death benefits paid to adult children who are not financially dependent are taxed on the taxable component — at 15 per cent (plus Medicare levy) on the taxed element, or 30 per cent (plus Medicare levy) on the untaxed element — whereas benefits paid to a spouse are generally tax-free.
An alternative is to nominate your legal personal representative, directing your super into your estate for distribution according to your will. This gives you more control and can be useful where you want your will to manage the balancing act between your partner and your children. However, it also means your super may be accessible to creditors during estate administration and can expose the benefit to family provision claims.
The key action is to review your nomination whenever your circumstances change — and to check whether it is still valid and coordinated with the rest of your estate plan.
For SMSF members, the stakes are higher still. If you and your spouse are the only members and trustees, your death means a new trustee must be appointed. In a blended family, this can become contentious if the surviving spouse appoints one of their own children, potentially disadvantaging your children. A clear succession plan documented in the trust deed is essential.
Binding Financial Agreements: A Tool, Not a Solution
Binding financial agreements under the Family Law Act 1975 allow couples to agree in advance how their assets will be divided if the relationship ends. In a blended family, they can help delineate which assets each partner brought into the relationship, protecting pre-existing wealth for children from a prior relationship.
However, courts can set aside these agreements under section 90K of the Family Law Act in various circumstances — including fraud, non-disclosure of material matters, unconscionable conduct, or a material change in circumstances relating to a child. Both parties must receive independent legal advice before signing, and strict procedural requirements apply.
A binding financial agreement addresses what happens if the relationship breaks down during your lifetime. It does not govern what happens to your assets after you die. Estate planning and family law planning are complementary, not interchangeable — and both need professional attention.
Family Provision Claims: The Risk You Cannot Eliminate
In every Australian state and territory, certain people can challenge a will if they believe they have not been adequately provided for. These family provision claims are particularly common in blended families.
Eligible claimants typically include your spouse or de facto partner, your children (including, in some jurisdictions, stepchildren who were dependent on you), and anyone who was financially dependent on you. The specific rules vary by state, but the principle is consistent: a court can override your will if it considers the distribution inadequate for a claimant’s maintenance and support.
Studies of Australian estate litigation indicate that adult children are consistently the most common claimants — accounting for around half to two-thirds of family provision cases in reviewed datasets — and that claimants achieve some change to the original distribution in roughly three-quarters of cases that proceed to judgment. In blended families, the competing obligations between a new spouse and children from a prior relationship make it nearly impossible to satisfy everyone fully.
You cannot prevent a family provision claim entirely, but you can reduce the risk by ensuring all potential claimants receive some provision. A well-drafted will that demonstrates genuine consideration of every eligible claimant’s needs — supported, perhaps, by a separate statement of wishes explaining your reasoning — puts your estate in a stronger position to defend a challenge. Leaving someone out entirely is far more likely to invite a successful claim than providing them with a defined, if smaller, share.
Executor Selection: An Underrated Decision
In a blended family, choosing the right executor matters more than usual. The executor administers your estate and manages conflicting interests among people who may not trust each other.
Appointing your current spouse as sole executor creates an obvious conflict if they are also a beneficiary and your children from a previous relationship are entitled to a share. Appointing one of your adult children creates the opposite risk. Some families address this with co-executors from each side, though this can create deadlocks. Others appoint an independent executor — a solicitor or professional trustee company — to remove the perception of bias. This costs more, but it can prevent disputes that would cost far more.
Having the Conversation
Perhaps the most important step is also the most difficult: talking about it. With your partner. With your children. With your stepchildren, if they are part of your life in a meaningful way.
These conversations are uncomfortable because they involve money, mortality and the acknowledgment that your family is not a single unit with perfectly aligned interests. But silence is almost always worse. Assumptions go unchallenged, expectations go unmanaged, and grief is compounded by the shock of discovering that the estate plan does not reflect what anyone expected.
You do not need to share every detail of your will. But being open about your intentions and reasoning gives everyone the opportunity to understand your decisions before they become irreversible. Your financial adviser can help facilitate this conversation if the dynamics are sensitive.
Discussion Points for Your Adviser
If you are in a blended family, there are several questions worth raising at your next review: How is your property owned, and is that structure consistent with your estate plan? Have you reviewed your super death benefit nomination since your most recent change in circumstances? Does your will adequately provide for both your current partner and your children from a previous relationship? Have you considered whether a testamentary trust, life interest or specific bequests would better serve your family? Is your executor appointment appropriate given the dynamics involved? Would a binding financial agreement complement your estate plan?
Estate planning in a blended family is not something you do once and forget. Regular reviews — ideally every two to three years, or after any significant life event — ensure your plan keeps pace with your life. The stakes are high, the emotions are real, and the consequences of getting it wrong can last a generation. But with the right advice and honest conversations, you can build a plan that protects everyone you care about.
References
1. Australian Bureau of Statistics. 2021 Census of Population and Housing — Family Blending (FBLF) classification. 12 per cent of couple families with dependent children were step or blended families.
2. Australian Institute of Family Studies. “Families and Family Composition” fact sheet (aifs.gov.au), drawing on 2021 Census data. Step families: 182,229; blended families: 99,564. 3. Family Law Act 1975 (Cth), sections 90B–90D (financial agreements before, during or after marriage), section 90G (requirements for binding agreement), section 90K (circumstances in which court may set aside agreement).
4. Superannuation Industry (Supervision) Regulations 1994, Regulation 6.17A. Requirements for binding death benefit nominations, including three-year lapsing period for APRA-regulated funds. Note: High Court in Hill v Zuda Pty Ltd [2022] HCA 21 confirmed Reg 6.17A does not apply to SMSFs.
5. Australian Taxation Office. “Superannuation death benefits” — guidance on taxation of death benefits paid to dependants and nondependants (ato.gov.au). Non-dependant beneficiaries: 15% (taxed element) or 30% (untaxed element) plus Medicare levy on the taxable component.
6. Moneysmart (ASIC). “Who gets your super if you die” — guidance on nomination types including lapsing, non-lapsing, and reversionary nominations (moneysmart.gov.au).
7. White, B., Tilse, C., Wilson, J., Rosenman, L., Purser, K. and Coe, S. “Estate Contestation in Australia: An Empirical Study of a Year of Case Law” (2015) 38(3) UNSW Law Journal 880. Analysis of family provision claims, claimant demographics and success rates.
8. Succession Act 2006 (NSW), section 57 (eligible persons for family provision claims); Succession Act 1981 (Qld), section 41; Administration and Probate Act 1958 (Vic), Part IV. Equivalent legislation exists in each state and territory.
