How can my will provide for my children from my first and second marriages?
The number of people entering second marriages (or more) has been increasing over the last few decades and as a result, many people are faced with a dilemma when it comes to their will. You may want to ensure that both your children from an earlier relationship and your current spouse are properly provided for. But is this achievable and what’s the best way to go about it?
The answer will be different for everyone. There is no one-size-fits-all solution.
It can depend on factors including:
- the financial circumstances and needs of your spouse and your children
- the length of the relationship with your spouse and any contributions made by your spouse to your assets
- the nature and value of your assets; if the asset pool is small or if most of the wealth is tied up in the family home, it can be difficult to make provision for all of your loved ones to the extent you would like to.
Family provision claims on an estate
There have been many cases before the Supreme Court of NSW where a spouse or children from an earlier relationship have made family provision claims. This means they seek provision (or additional provision) from an estate because they feel they haven’t been adequately provided for.
Because every family situation is different, it’s very difficult to generalise about the decisions made by the Court in these claims. However, often the Court talks of the primary obligation of the deceased being to his or her spouse, particularly if it’s been a long term relationship. So it is important to consider how the spouse can be adequately provided for.
Options to consider
There are different types of gifts to consider when you’re deciding how to share your estate between your spouse and children.
Perhaps the most obvious option is to divide the estate between children and spouse, not necessarily in equal shares. Will this leave the spouse with enough money to fund their accommodation and other needs? Will the children receive an adequate share, considering their particular needs? If the estate is relatively small this option may not be viable.
Another option is to leave a life estate to the spouse. This means the spouse has use of the assets – often the home – during his or her lifetime. On his or her death, the assets pass to the children. This can be an option to consider if the estate simply isn’t large enough to provide adequately for everyone by giving them outright gifts. A life estate can be over the whole estate or a particular asset.
To determine whether a life estate over the family home will be adequate provision for a spouse, there are other issues to consider. For example, what if the home becomes too much for the spouse to manage and they wish to move to smaller or more easily accessible accommodation? What if the spouse’s health declines and they need to move to an aged care facility? In fact it’s possible to have a portable life estate that allows for the possibility of the home being sold to fund a change of accommodation for the spouse. Then on the death of the spouse, the will can provide for the estate (in whatever form it then takes) to pass to the children.
These are just a couple of the options to consider as you decide how to provide for a spouse and children, remembering each option has advantages and disadvantages.
If your situation means you need to consider how to provide for your spouse and your children from first and second marriages, it’s vital that you talk to a lawyer who specialises in wills and estates law. You’ll need to receive expert advice about your options and make sure your will is drafted in such a way that it best achieves your objectives. Contact us today to book an appointment.