Estate planning is no longer a “set and forget” task — especially with nearly one in three Australian families now considered blended. Without a clear and up-to-date plan, there’s a real risk that biological children or loved ones could be unintentionally left out.
A common issue arises when everything is left to a spouse. While this may feel like the right thing to do, the surviving spouse can legally change their Will later, potentially excluding the children of the deceased. One solution is a Mutual Will Agreement, which ensures both parties are bound to the same terms, even after one passes away.
A testamentary trust allows you to direct your assets into a trust established by your Will, with your chosen beneficiaries in mind. This structure can make it easier for beneficiaries to receive their inheritance and can reduce the risk of disputes, especially in blended families. You can also nominate an independent trustee to manage the distribution of assets. This helps ensure decisions are made fairly and in line with your wishes, providing an added layer of protection for both the estate and its beneficiaries.
Asset ownership matters more than many realise. Jointly held assets automatically pass to the surviving owner, bypassing the Will — which can leave children from previous relationships with nothing. Holding assets as tenants in common allows your share to pass via your estate. Where the family home is involved, you may consider a life interest, which lets your partner remain in the home, before it passes to your children at a specified time or upon the death of your partner.
These scenarios are increasingly common as family structures evolve. Public headlines involving high-profile divorces and remarriages only reinforce just how quickly family dynamics can shift. Your estate plan needs to be just as dynamic.
Binding Financial Agreements (such as prenups or postnups) are another tool to consider. These help define how assets are managed and divided in the event of separation or death, and can reduce the risk of conflict later.
Tax is another important factor. Superannuation death benefits paid to a spouse are tax-free, but if paid to adult children, they can attract tax of up to 17%. In many cases, it may be more tax-efficient to direct super to a spouse and use other estate assets for children.
For those inheriting later in life — typically in their 50s or 60s — we often recommend using those funds to reduce debt or contribute to super. With the superannuation transfer balance cap increasing to $2 million, couples could potentially generate up to $100,000 each p.a. in tax-free retirement income with the right strategy.
When there’s no valid Will, state intestacy laws apply — and the outcomes often don’t reflect the deceased’s wishes. Stepchildren are usually excluded, and distant relatives may benefit instead.
To avoid these issues, regular reviews and clear communication are essential to give your family the clarity and protection they need when the time comes. A well-structured Will, reviewed every few years or after major life changes, is a simple but powerful way to ensure our estate plans stay relevant — and allow us to reflect on what matters most.
Prue Cheeseman-Goodes is an adviser of HLB Mann Judd Wealth Management (NSW) Pty Ltd (AFSL 526052). This content contains general advice which does not consider your particular circumstances. You should seek advice from HLB Mann Judd Wealth Management (NSW) who can consider if the strategies and products are right for you. Information based on historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.