Australia has one of the highest rates of relationship re-formation in the developed world. If you are in a second (or subsequent) marriage or de facto relationship and you have children from a previous relationship, your estate plan needs to account for a set of risks that simply do not exist in first-marriage families.
The stakes are high. Without careful blended family estate planning, it is entirely possible — and disturbingly common — for your children to receive nothing from your estate. This guide explains the Victorian legal framework, the key structures available to you, and the practical steps every blended family in Victoria should take to protect children's inheritance in a second marriage.
1. The Blended Family Risk: Why Standard Wills Fail
The most common Will structure for married couples is the "mutual" or "mirror" Will. Each spouse leaves everything to the other, and then to the children once both spouses have died. In a first-marriage family with shared children, this works well enough.
In a blended family, it can be catastrophic.
Here is the scenario that plays out repeatedly across Victoria:
- You and your spouse each make Wills leaving everything to each other.
- You pass away. Your entire estate — the family home, savings, investments — passes to your surviving spouse.
- Your surviving spouse is now the absolute owner of those assets. There is nothing legally preventing them from making a new Will.
- Your surviving spouse re-partners or simply decides to change their Will, leaving everything to their own children, a new partner, or someone else entirely.
- Your children inherit nothing.
This is not a theoretical risk. It happens regularly, and it happens to families who assumed their "standard" Wills were sufficient. The surviving spouse is not acting maliciously in most cases — they are simply responding to changed circumstances. But the effect on your children is the same.
Key insight: A standard mutual Will gives your surviving spouse absolute ownership of your assets and absolute freedom to distribute them however they choose. In a blended family, you need structures that balance providing for your spouse with protecting your children's inheritance.
2. The Victorian Legal Framework: Intestacy and Blended Families
If you die without a valid Will in Victoria, the Administration and Probate Act 1958 (Vic) dictates how your estate is distributed. The intestacy rules were designed with traditional family structures in mind and interact poorly with blended families.
How intestacy works in Victoria
Under the current Victorian intestacy provisions:
- If you have a surviving spouse and all of your children are also children of that spouse, your spouse receives the entire estate.
- If you have a surviving spouse and children who are not children of that spouse (i.e., children from a previous relationship), the distribution is different. Your spouse receives a statutory legacy (currently set at a prescribed amount), personal chattels, and a share of the residue. Your children share the remaining residue.
While the intestacy rules do provide some recognition of children from previous relationships, the distribution is formulaic and may not reflect your intentions. More importantly, intestacy provides no asset protection, no structured distribution, and no control over how or when assets reach your children.
Key insight: Dying intestate in a blended family means the government decides who gets what — according to a formula that almost certainly does not match your wishes. A properly drafted Will with testamentary trust provisions is essential.
3. Joint Tenancy vs Tenants in Common: The Hidden Trap
This is one of the most critical — and most frequently overlooked — issues in blended family estate planning.
In Victoria, property can be owned in two ways:
Joint tenancy
When property is held as joint tenants, each owner has an equal, undivided interest. Upon the death of one joint tenant, their interest automatically passes to the surviving joint tenant(s) by the right of survivorship. This happens by operation of law — it overrides your Will entirely.
If you own your family home as joint tenants with your spouse, your share of the home will pass directly to your spouse when you die. It will not form part of your estate. It will not go into your testamentary trust. Your Will cannot redirect it to your children.
Tenants in common
When property is held as tenants in common, each owner has a distinct, identifiable share (e.g., 50/50, 60/40, or any other proportion). Upon death, your share forms part of your estate and is distributed according to your Will.
Key insight: If you are in a blended family, you should generally hold property as tenants in common, not as joint tenants. This ensures your share of the property passes through your Will and can be directed into a trust for your children's benefit. Your lawyer can arrange a severance of joint tenancy — a relatively straightforward process in Victoria.
4. Life Interest Trusts: Providing for Your Spouse While Protecting Your Children
The core dilemma in blended family estate planning is this: you want to provide for your surviving spouse, but you also want to ensure your children ultimately receive their inheritance. A life interest trust (sometimes called a "right to reside" trust or "life estate") can achieve both objectives.
How a life interest trust works
Under a life interest trust created in your Will:
- Your assets (or a portion of them, such as your share of the family home) are held in trust by a trustee you nominate.
- Your surviving spouse receives the life interest — the right to live in the property and/or receive income generated by the trust assets during their lifetime.
- Your children are named as the remainder beneficiaries — they receive the underlying capital when the life interest ends (typically upon the surviving spouse's death, remarriage, or entry into a new de facto relationship).
This structure means your spouse is housed and provided for, but they never become the outright owner of those assets. They cannot sell the property, give it away, or redirect it in their own Will.
Practical considerations
- Maintenance and outgoings: Your Will should specify who is responsible for rates, insurance, maintenance, and repairs during the life interest period.
- Downsizing: Consider including a provision allowing the trustee to sell the property and purchase a replacement property if your spouse needs to downsize — with the surplus funds remaining in trust for your children.
- Trigger events: Define clearly what ends the life interest — death, remarriage, entering a new de facto relationship, or voluntary surrender.
5. Separate Testamentary Trusts for Children of Different Relationships
Where you have children from more than one relationship, a single testamentary trust may not be appropriate. Different children may have different needs, different ages, and different relationships with your surviving spouse.
Why separate trusts matter
- Conflict minimisation: A single trust administered by your surviving spouse for the benefit of both "their" children and "your" children is a recipe for conflict. Separate trusts with independent trustees can reduce this tension significantly.
- Tailored distribution: Younger children may need funds for education; adult children may benefit from a lump sum distribution or an income stream. Separate trusts allow you to tailor the terms to each child's circumstances.
- Independent trustees: You can appoint different trustees for each trust — for example, a family member from your side of the family for your children's trust, and a different person for your spouse's children's trust.
Testamentary trusts also offer significant asset protection benefits. Assets held within a testamentary trust are generally protected from a beneficiary's creditors, bankruptcy, and — critically — from any future family law claims if your child's own relationship breaks down.
6. Family Provision Claims: The Risk of Will Challenges
No matter how carefully your Will is drafted, there is always a risk that someone may challenge it under the family provision rules in Victoria.
Who can make a claim?
Under Part IV of the Administration and Probate Act 1958 (Vic), the following persons may apply to the Supreme Court of Victoria for further provision from a deceased estate:
- A spouse or domestic partner of the deceased
- Children of the deceased (including adopted children)
- Stepchildren who were, at the time of the deceased's death, a member of the household of which the deceased was also a member
- A former spouse who was receiving or entitled to receive maintenance from the deceased
- A registered caring partner
- A grandchild, or a person who believed the deceased was their parent, if they were a member of the deceased's household
What this means for blended families
In a blended family, the pool of potential claimants is significantly larger. Your surviving spouse, your biological children, and potentially your stepchildren may all have standing to challenge your Will. If your Will is perceived as "unfair" — even if it reflects your genuine intentions — a court may vary it.
How to reduce the risk
- Adequate provision: Ensure your Will makes reasonable provision for all potential claimants, particularly your spouse and your biological children.
- Statement of wishes: Prepare a detailed, contemporaneous statement explaining your reasons for distributing your estate the way you have. While not binding, courts give weight to clear, well-reasoned explanations.
- Professional drafting: A Will that is properly structured and legally robust is harder to challenge successfully.
- Regular review: Update your estate plan whenever your circumstances change — new relationships, estrangements, changes in financial position.
Key insight: No estate plan can guarantee immunity from a family provision claim. However, a well-structured Will with testamentary trusts, supported by a clear statement of wishes, is far more defensible than a simple Will or no Will at all.
7. Superannuation and BDBN Alignment
One of the most commonly misunderstood aspects of estate planning is the treatment of superannuation. Your super is not automatically part of your estate — it sits outside your Will and is paid at the discretion of your superannuation fund's trustee, unless you have made a valid Binding Death Benefit Nomination (BDBN).
Why this matters in blended families
If you do not have a valid BDBN, your super fund trustee will decide who receives your death benefit. They will typically pay it to your "spouse" as defined under superannuation law — which may be your current partner, not the parent of your children from a previous relationship.
Even if you have a BDBN, it may direct your super to your "legal personal representative" (i.e., your estate) or to "my spouse" — without specifying which spouse if there is any ambiguity, or without considering that your super will then be dealt with under your Will. If your Will is a standard mutual Will leaving everything to your spouse, your super ends up in the same pool of assets that your surviving spouse controls absolutely.
Aligning your BDBN with your estate plan
- Review your current BDBN: Check whether it is still valid (many non-lapsing BDBNs still require the fund deed to authorise them), and confirm who is nominated as the recipient.
- Direct super to your estate: If your Will contains a testamentary trust, you may want your BDBN to direct your super to your "legal personal representative" so it flows into your estate and then into the trust. This must be coordinated with your Will.
- Consider direct nominations to children: In some cases, it may be appropriate to nominate your children directly — but only if they qualify as "dependants" under superannuation law.
- SMSF considerations: If you have a self-managed super fund, the SMSF trust deed and its succession provisions must be reviewed to ensure they align with your Will and your broader estate plan.
8. The Mutual Wills Doctrine: Why It Is Not Enough
Some couples in blended families attempt to address the "re-willing" risk by entering into a mutual wills agreement — a legally binding promise that neither spouse will revoke or alter their Will after the first spouse dies.
How the mutual wills doctrine works
The mutual wills doctrine is recognised in Victoria. If it can be established that both parties agreed to make Wills in a particular form and not to revoke them, equity may impose a constructive trust on the estate of the surviving spouse if they breach that agreement by making a new Will.
Why it is unreliable
In practice, the mutual wills doctrine has significant limitations:
- High evidentiary bar: Courts require clear evidence of a binding agreement — not merely that the couple made similar Wills at the same time. Oral agreements are very difficult to prove after one party has died.
- Enforcement requires litigation: Your children would need to bring a claim in the Supreme Court to enforce the mutual wills agreement — an expensive and uncertain process.
- Does not prevent asset disposal during lifetime: Even if the agreement prevents the surviving spouse from changing their Will, it does not prevent them from spending, gifting, or otherwise disposing of the assets during their lifetime.
- Interaction with family provision claims: A family provision claim by the surviving spouse's own children could override the mutual wills arrangement.
Key insight: Testamentary trusts — particularly life interest trusts — provide far more reliable protection than the mutual wills doctrine. A trust is created and takes effect under your Will; it does not depend on the surviving spouse's cooperation or on costly litigation to enforce.
9. Practical Checklist: 7 Things Every Blended Family Should Do
If you are in a blended family in Victoria, here are the seven steps you should take to protect your children's inheritance:
- Review your property ownership structure. If you hold property as joint tenants with your spouse, consider severing the joint tenancy so your share passes through your Will, not by survivorship.
- Create a Will with testamentary trust provisions. A standard mutual Will is not sufficient. Your Will should establish one or more testamentary trusts — including a life interest trust if you want to provide for your spouse while preserving capital for your children.
- Consider separate trusts for children of different relationships. This reduces conflict, allows tailored distribution, and enables you to appoint independent trustees for each group of children.
- Review and update your Binding Death Benefit Nomination. Ensure your BDBN is valid, current, and aligned with your Will. If your super should flow into a testamentary trust, your BDBN should typically direct the benefit to your legal personal representative.
- Prepare a comprehensive statement of wishes. Document your reasoning for the distribution decisions in your Will. This is particularly important in blended families where family provision claims are more likely.
- Appoint appropriate executors and trustees. Choose executors and trustees who are independent, competent, and trusted by all sides of the family. In complex blended family situations, a professional trustee may be appropriate.
- Review your estate plan regularly. Blended family dynamics change. Review your Will, powers of attorney, BDBN, and trust structures at least every three years, or whenever there is a significant change in your circumstances.