Grace Bacon
January 27, 2026 — 5:30pmSave
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With blended families now accounting for more than one in 10 Australian families with dependent children, estate planning for families of all shapes and sizes has never been more important. Without a clear estate plan, your final gifts to loved ones may be soured by disputes and disappointment.
As with any approach to financial affairs, a robust estate plan begins with open and honest conversations long before pen is put to paper, and the best time to start speaking to your partner about this may be sooner than you think.
Estate planning for blended families requires a nuanced approach to make sure everything is fair and there are legal protections for all involved.Simon Letch
Although money-talk can be rather unromantic, starting these conversations as soon as your relationship becomes serious can help to manage any newfound tension stemming from children from a first marriage worrying about being cut out, new spouses fearing financial insecurity, or stepchildren fearing being forgotten altogether.
A good first step before any estate planning takes place is to plan for what might happen to your assets in the event your relationship with your new partner does not go as expected. A binding financial agreement (BFA) can provide clarity around how assets are to be combined or separated and protect the financial interests of both parties in the event of a relationship breakdown.
Helpfully, a BFA can be set up before or during a relationship and updated to account for major life changes such as the birth of a child or the purchase of a home.
When you are ready to sit down and draft your will, there are a few elements of estate planning that I encourage clients to keep in mind ensure they end up with the best possible outcome for yourself and those you care about.
Each approach to succession planning can look very different, but the essential element that underpins each option is communication.
A common cause of tension among blended families are Family Provision laws, which see that your spouse, children, and stepchildren are given certain rights within a will – including the right to challenge a will if they believe they haven’t been sufficiently provided for. Under this, even the best-intentions can be overturned if they aren’t legally sound.
You should also consider any minor children in your estate planning, especially if there are stepchildren involved as across most of Australia, stepchildren are not automatically included as beneficiaries under intestacy rules unless they are legally adopted.
Importantly, your will only covers assets in your personal name such as direct property, bank accounts, shares and so on. It may also come as a surprise is that your superannuation and life insurance don’t automatically follow your will. Instead, these require separate beneficiary nominations – a particularly important step for blended families.
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While some funds allow for a non-binding nomination which sees your super or death benefit payment paid as the trustee sees fit, a binding nomination is best as otherwise your super or death benefit payment could end up with someone you didn’t intend. A regular review of this is strongly recommended, particularly after remarriage or the birth of additional children.
Mutual wills may be a suitable option for many blended families. Mutual wills are a pair of wills made together with an agreement that they are not to be altered after one partner dies. These can protect children from previous relationships but can also be limiting for the surviving spouse in the event they re-partner.
They may also not address individual wishes, particularly if each partner has specific wishes to look after children from previous relationships, so it is worth considering if this is the right option for you.
Another popular option among blended families is a testamentary trust, which is created through your will. These trusts provide income for your spouse during their lifetime while also preserving capital for your children later, balancing the needs of both your new partner and your children from a previous relationship.
A similar route that can work well for blended families is a Life Interest Trust, which allows your spouse to live in the family home or receive income from investments, under the proviso that the property will eventually be inherited by your children upon the surviving partner’s passing.
With any of these options, you may also like to include a letter of wishes to your beneficiaries, explaining your decisions in plain language to prevent any misunderstandings or upset.
Much like families, each approach to succession planning can look very different, but the essential element that underpins each option is communication. By having these conversations with your family – new and old – you can ensure there is no heartache and hurt to be had by your loved ones when the inheritance arrives.
The first step? Start by seeking professional advice and ensure your tax, legal and financial adviser work together to ensure you’re equipped with an estate plan that is the perfect fit for you and your family – whatever it looks like.
Grace Bacon is the Partner of RSM Financial Services Australia (AFSL 238 282), advising clients on wealth management, retirement planning and succession planning.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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