Succession Planning for Blended Families
The historical view of an “average” family comprised of a husband and wife (one marriage only) and their natural born children (more commonly!). However, as society evolves, so too does this picture. These days, we see a great variety of participants that make up the family unit. If you have seen the Film Blended with Drew Barrymore you know what I mean (and if you haven’t you should, it is fabulous!). The marital arrangements can vary in small ways (a couple on their second marriage) or it can be very complicated (think the brady bunch). I have seen a situation in the estate of man who died intestate where consideration was given to a Wife, a girlfriend, an ex-wife and children from the various relationships. All of them were “eligible applicants” for the definition under the Succession Act, to bring a claim on the estate for further provision. As I said, it can get complicated! A thorough family history is needed when you are embarking on estate planning. A question that arises often in light of this, is who a child of the relationship for the purpose of estate planning (and ultimately, in the context of Family Provision Applications). The Succession Act defines “child” (in relation to a deceased person) as any child, stepchild, or adopted child of that person. Child, rather obviously referring to your natural born issue. An adopted child too, is relatively straightforward as this refers to a child with whom you have taken formal, legal steps to recognise the parent/child relationship. Stepchild however is where the situation gets more complicated. A stepchild under the Succession Act is a child of a spouse of the deceased person where the relationship continued until the deceased persons death. Importantly, this relationship of stepchild-stepparent does not cease merely because the spouse predeceases the deceased person in question. Clear as mud! Another example from practice. A couple are on their first marriage, but the wife has a child from a previous relationship. The couple have no children of their own and the wife dies. As the relationship between the husband and wife subsisted at the time the wife dies, the wife’s child is a stepchild of the relationship, despite the fact that the wife pre-deceases the husband. It will be important what contributions they each made to joint assets. Another scenario that is becoming increasingly thought provoking, is the impact of the In Vitro Fertilization (“IVF”) process in defining children of a relationship. If the IVF process uses samples from the father, the child is a natural born child despite the artificial intervention. However, where a couple have used a donor sample, legal adoption may be required to perfect your child’s interest in the fathers’ estate. Another scenario. A couple use IVF, one party uses their own sample and the other party uses a donor sample (for simplicity, lets say the mother uses her own sample and the father a donor sample). The IVF is successful, and the child is born. Whilst the couple are in a relationship, the Succession Act protects this child’s status as a stepchild (a child of the relationship). However, should the relationship between the mother and father end, the child would no longer be a ‘child’ of the fathers for the purposes of family provision application. This is often a surprise to our clients as they have, for all intents and purposes, been the parent to the child through out their life. Sadly, too, this realisation often comes when it is too late to resolve any potential problems. What these examples really highlight is how important estate planning is, particularly in the context of blended families. If you are in doubt about what steps you can take to protect your child’s interest, or if you are unsure about your position as a child of a relationship, please contact us for a consultation on 07 3839 7555 or email Katherine.Blood@Perspectivelaw.com or Tony.Crilly@Perspectivelaw.com.