This article was written by Nancy Wang, Principal solicitor at W & G Lawyers. For further information about Nancy Wang’s professional background, legal experience, and areas of practice, please click on her name to view her full profile.
Blended families are increasingly common across Australia, yet they remain one of the most complex situations in estate planning. Where two people come together each with children from prior relationships, real property in various ownership structures, superannuation, insurance, and accumulated wealth — the stakes of getting an estate plan wrong are very high.
This article walks through the key issues every blended family should consider before meeting with a solicitor. It is general information only. Because every family’s situation is different, we strongly recommend obtaining independent legal advice tailored to your circumstances.
1. Why Blended Families Need a Different Approach
In a simple estate plan — one couple, shared assets, shared children — standard wills and survivorship arrangements often work well enough. In a blended family, they almost never do.
The core tension is this: you want to provide for your current partner, but you also want to ensure your own children are not left out if you die first. Without careful planning, the law may produce an outcome no one intended.
For example, if everything passes to your surviving partner automatically (by survivorship or under their will), your children from a prior relationship may ultimately receive nothing — because your partner’s estate passes to their own children when they later die.
This is not a hypothetical risk. It is one of the most common estate disputes we see.
2. How Your Property Is Owned Matters Enormously
Before you can plan your estate, you need to understand how each asset is currently held — because ownership structure determines what your will can and cannot control.
Joint Tenancy means both owners hold the whole property together. When one owner dies, the property passes automatically to the surviving owner by right of survivorship — regardless of what the deceased’s will says. In a blended family, this means property held as joint tenants will go to the surviving partner, not to your children.
Tenants in Common means each owner holds a defined share (which can be equal or unequal). When one owner dies, their share forms part of their estate and is dealt with under their will. This gives you the ability to direct your share to your children, or into a testamentary trust for their benefit.
Sole ownership means the property is yours entirely and passes through your will.
It is common for blended families to have a mix of all three — a jointly owned family home, an investment property held as tenants in common, and other assets in sole names. Each needs to be considered separately. We have previously written about this in detail: Understanding Co-Ownership: Joint Tenancy vs Tenants in Common.
3. Superannuation Does Not Pass Through Your Will
This is one of the most misunderstood aspects of estate planning. Many people assume their superannuation will be distributed according to their will. It will not — unless specific arrangements are in place.
Superannuation is held in a trust and governed by the fund’s trust deed and superannuation legislation. The fund trustee decides who receives your death benefit, unless you have a valid Binding Death Benefit Nomination (BDBN) directing otherwise.
In a blended family, this is especially important because:
- Your BDBN may name a former spouse, or a child from a prior relationship, reflecting circumstances that have since changed
- Without a current BDBN, the trustee will exercise discretion — which may favour your current partner over your children, or vice versa
- Superannuation can be directed to your estate (and then dealt with under your will and testamentary trust), but only if your nomination is set up correctly
For a full overview of how superannuation interacts with estate planning, we recommend reading our article: Understanding Superannuation in Estate Planning.
4. SMSFs Require Separate and Careful Attention
If you and your partner operate a Self-Managed Super Fund (SMSF), the estate planning considerations become significantly more complex.
An SMSF is a private superannuation fund that you control as trustee. On death, questions arise about: who controls the fund, whether the surviving partner can remain as sole trustee, how the death benefit is determined and paid, and whether the SMSF trust deed allows for the arrangements you intend.
Common issues in blended family SMSFs include:
- The surviving partner gaining control of the SMSF and its assets, effectively excluding a deceased member’s children
- Conflicting interests between the surviving member and the estate of the deceased
- Inadequate or expired BDBNs that leave distribution to trustee discretion
- LRBA (borrowing) arrangements that may be affected by a change in membership
We have written about SMSF property structures in: Can You Use Your SMSF to Buy Property? and Common Mistakes to Avoid When Using an SMSF to Buy Property with a Loan.
SMSF estate planning should always involve your solicitor, your accountant, and your financial adviser working together.
5. Insurance and Your Estate Plan
Life insurance and income protection policies are often a significant part of a family’s financial picture — but they need to be integrated carefully into your estate plan.
Policies held inside superannuation are paid as a superannuation death benefit, subject to the BDBN rules discussed above. Policies held outside superannuation (personally owned) are paid directly to the nominated beneficiary or to your estate, depending on how the policy is structured.
In a blended family, you should review:
- Who is nominated as beneficiary on each policy
- Whether those nominations reflect your current intentions
- Whether the proceeds should flow to your estate (for distribution under your will and testamentary trust) or directly to a specific person
- The tax treatment of insurance proceeds depending on how they are received
These decisions should not be made in isolation — they need to align with your broader estate plan.
6. Mutual Wills — A Binding Agreement Not to Change Your Will
Mutual wills are a specific estate planning arrangement where two people (usually a couple) agree to make wills in agreed terms and not to revoke or alter those wills without the other’s consent.
The purpose in a blended family is to prevent the surviving partner from later changing their will to exclude a deceased partner’s children.
However, mutual wills are not a simple or risk-free solution. They are legally complex, can create difficulties if circumstances change, and have limitations that are not always well understood. If the surviving partner remarries or acquires new assets, the enforceability and practical effect of the mutual wills arrangement can become contentious.
Mutual wills should only be entered into with proper legal advice and as part of a carefully considered overall plan.
7. Testamentary Trusts — Protecting Your Children’s Inheritance
A testamentary trust is a trust created by your will that comes into effect after your death. Rather than your children receiving their inheritance outright (and at risk of being spent prematurely, claimed by creditors, or lost in a relationship breakdown), assets are held and managed by a trustee for their benefit.
In a blended family, testamentary trusts are particularly valuable because they allow you to:
- Provide for your surviving partner during their lifetime (through income or capital distributions)
- Ensure the remaining capital passes to your own children after your partner’s death
- Protect your children’s inheritance from claims by your partner’s future spouse or creditors
- Manage tax outcomes, particularly for minor beneficiaries
The key is in how the trust is drafted. Poorly drafted testamentary trusts can fail to achieve the protection they were designed for, create disputes about control, or produce unintended tax outcomes.
We have written about this in detail: Testamentary Trusts.
There is also an important dimension that applies where any beneficiary may be a foreign person — including adult children living overseas or holding foreign citizenship. We recently published: FIRB, Foreign Trusts and Estate Planning – A Hidden Risk for Testamentary and Discretionary Trusts.
8. The Role of the Executor
Your executor is the person responsible for administering your estate after your death — locating assets, paying debts, obtaining probate if required, and distributing the estate in accordance with your will.
Choosing the right executor in a blended family is critical, and often more difficult than in a simpler situation. Consider:
- Conflicts of interest: an executor who is also a beneficiary may face tensions when making decisions that affect other beneficiaries
- Complexity: administering an estate with multiple properties, an SMSF, testamentary trusts, and competing interests from children of different relationships requires significant time, skill, and impartiality
- Disputes: blended family estates are more susceptible to disputes, and an executor who is closely aligned with one “side” of the family can inflame rather than resolve conflict
9. Family Provision Claims — The Risk of a Challenge
Even a carefully drafted will can be challenged. Under Queensland’s Succession Act 1981, eligible persons — including a spouse, former spouse, children, and stepchildren who were maintained by the deceased — can apply to the court for provision from the estate if they have been left without adequate provision.
In blended families this risk is amplified. A deceased’s children from a prior relationship may feel overlooked in favour of the surviving partner. A current partner may feel that a testamentary trust arrangement is too restrictive. Any of these parties could bring a claim.
The better protection against family provision claims is a properly considered estate plan that documents why each decision was made, and reflects genuine thought about the needs of all potential claimants.
10. Where to Start
If you are in a blended family — or about to form one — the right time to review your estate plan is now, not after something goes wrong.
Before meeting with a solicitor, it helps to gather the following (not exclusive list):
- A list of all real property and how each is held (joint tenancy, tenants in common, sole name)
- Superannuation fund details and copies of any existing BDBNs
- SMSF trust deed and most recent financial statements (if applicable)
- Family trust deed and most recent financial statements (if applicable)
- Life insurance and death benefit policy details and current nominations
- Any existing wills, (enduring) powers of attorney, or advance health directives
- A clear picture of the family — children from all relationships, their ages, and any special needs or vulnerabilities
How W & G Lawyers Can Help
At W & G Lawyers, we advise clients across the full range of estate planning matters, including complex blended family arrangements. We work with your accountant and financial adviser to ensure your legal, tax, and financial arrangements are properly coordinated.
Our services include:
- Will drafting, including testamentary trust wills
- Advice on property ownership structures and severance of joint tenancies
- Superannuation and SMSF estate planning
- Mutual will agreements
- (Enduring) Powers of attorney and advance health directives
- Estate administration and probate
- Family provision and estate dispute advice
We speak English and Mandarin Chinese. Our office is located at 68 Bryants Road, Shailer Park QLD 4128.
Resources
https://wglawyers.com.au/understanding-co-ownership-joint-tenancy-vs-tenants-in-common/
https://wglawyers.com.au/understanding-superannuation-in-estate-planning/
https://wglawyers.com.au/testamentary-trusts/
https://wglawyers.com.au/firb-foreign-trusts-and-estate-planning-a-hidden-risk-for-testamentary-and-discretionary-trusts
https://wglawyers.com.au/can-you-use-your-smsf-to-buy-property-heres-what-you-need-to-know/
https://wglawyers.com.au/common-mistakes-to-avoid-when-using-an-smsf-to-buy-property-with-a-loan/
Visit or Contact Us
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📞 (07) 2810 5666
🌐 www.wglawyers.com.au
✉ info@wglawyers.com.au
Disclaimer
The article published by W & G Lawyers is intended to provide general information only and does not constitute legal advice on any subject matter. By accessing or reading this article, the reader acknowledges that no solicitor–client relationship is created between the reader and W & G Lawyers.
The content should not be relied upon as a substitute for obtaining legal advice from a qualified legal practitioner. Readers are encouraged to engage a lawyer to obtain advice tailored to their specific circumstances. You may contact our office or locate a solicitor through the Queensland Law Society online directory at https://www.youandthelaw.com.au/directory
This article does not take into account all potential future legislative amendments, regulatory changes, or developments in case law. Accordingly, the content may not reflect subsequent changes in the law and should not be relied upon as legal advice for any particular situation.
This article will not be updated after publication. Any subsequent developments in the law or legislative