There has been an increase in family law disputes as the number of blended families and divorce requests rise. Currently, there is no legal requirement to include your step-children in your Will and therefore if you want to ensure they receive some of your inheritance when you die, writing them into your Will is the best option.
Who is a step-parent?
S 4 of the Family Law Act 1975 defines a step-parent as a person who:
- is not a parent of the child;
- is, or has been, married to or a de facto partner of, a parent of the child; and
- treats, or at any time while married to, or a de facto partner of, the parent treated, the child as a member of the family formed with the parent.
Can a step-child challenge my Will?
Under section 90(c) of the Administration and Probate Act 1958, a step-child is included as an eligible person and may contest a Will if, at the time of the deceased’s death, they were under the age of 18 years, a full-time student aged between 18 years and 25 years, or a step-child with a disability. Furthermore, under section 90(f) a step-child not referred to in subsection (c) is also eligible.
However, until recently, if your step-child was not written into your Will, they would only have a limited chance of success if contesting it. The court would have to consider the closeness of the relationship between the step-child and step-parent, the age of the step-child and when they became a member of the family, and the level of financial, education and emotional support that the step-child depended on from the step-parent.
Recent court decision
In the recent Victorian Supreme Court Decision of James v Rost; Langan v Rost, two step-children brought an action against their step-mother who left her estate to her biological child and grandchild, even though the deceased husband (the biological father of the step-children), had contributed to the estate’s value. The court ruled that parents must also consider their step-children and not just biological children in their Wills and that it is a step-parent’s moral duty to consider the financial well-being of all children, even if they come from another relationship. In balancing the interests of both the step-children and the biological children, the court awarded $170,000 of the $900,000 estate to the step-children even though they had not been raised in the blended family home as half of the estate (which was real property) came from the father.
What you should do to avoid any inheritance issues
- It is encouraged for parents to discuss any inheritance plans with their children;
- Seek expert advice to ensure your Will is structured properly, and all members of the family you wish to include in your Will are written in;
- Understand the implications for the beneficiaries of your Will;
- Develop a trust over the estate’s assets. This may be essential where there is a need to protect the surviving spouse from the deceased’s children of a previous relationship who cannot be trusted to consider their step-parents interests over their own. The interests of the children are also protected because the trust will ensure they receive their inheritance after the second spouse dies or enters into a new relationship; and
- Look for one or more trustees to manage the trust who are independent of the children. This will ensure the surviving spouse is looked after financially until they die and leaves no room for the children to financially manipulate the surviving spouse into getting some of their inheritance early.
Nicola Maltman – Law Clerk – Matthies Lawyers