Blended Families and Wills: Keeping Things Fair
Life gets more complicated by the day, and families are no exception. We see this in the rise of the number of “blended families”; a couple, children they have had together, and one or more children from prior relationships. Aside from the practical day-to-day complications such a family can bring, planning your Will is made more complicated.
Consider the following scenario:
Jane and John are a married couple and have one child together, James. John had a previous marriage and he had two children he is still very close to, Fred and Claire. John and Jane decide to make “mirror Wills”, leaving everything to the other and when they have both passed away, it all will be left equally between all three children, James, Fred and Claire. John passes away.
If John dies before Jane, Fred and Claire may be concerned about Jane not following through with giving each of them their one-third share when she dies. Legally, there is nothing stopping Jane from changing her Will later to leave everything to James, or any other person. If Jane gets a new partner, there might also be relationship property claims against the property.
What could John have done instead?
Life Interest Will
John could leave Jane an interest in his property, for her to use during her lifetime. On Jane’s death, that interest will end and John’s share of the property can be distributed equally to James, Fred and Claire, or however John wants.
Contracting Out Agreement
If John and Jane agree, they can complete a “Contracting Out Agreement” which sets out what the other can expect to receive at the end of the relationship. John can then work out in his Will what will be available to give to Jane and leave the rest of his estate to Fred, Claire and James.
John and Jane could create mutual Wills. This requires a written agreement between two people to gift their property in a particular way, and then neither will revoke their Will without the knowledge of the other. If one person dies and the survivor changes their Will then the courts can intervene for the beneficiaries who were originally to going to inherit.
John could set up a family trust during his lifetime to benefit Jane, James, Fred, Claire and himself. The trust could carry on after John’s death and, provided the trust is set up and properly maintained, Fred and Claire would have a solid expectation of receiving benefits from the trust.
If you are part of a blended family, or this is a possibility in the future, you should seek legal advice to ensure that everything is in place and things go the way you wish when you die. You need to consider the ages of family members and your responsibilities to them, their particular needs, your assets, and existing ownership.
If you would like to know more, please contact us for advice tailored to your specific circumstances.