The complexity of estate planning increases when there are children from previous relationships, a new spouse, children of different ages and assets acquired at different stages of life. There can be competing interests that a traditional ‘everything to my spouse, then to the children’ estate plan doesn’t necessarily address.

Abbey John, an estate-planning lawyer at Estates Now, sees this regularly.

It is becoming more common to plan for blended families, instead of the traditional linear approach down the family tree.

A 25-year-old who is financially independent has very different needs than a 10-year-old who still depends on their parents. Add into the mix the emotional complexity of the family home as part of the estate, eligibility for superannuation benefits and investments.

A simple estate plan can become anything but. Abbey John shared her insights on the common mistakes families make, and the steps for families to follow.

The changing nature of households

Uniting’s 2024 Families report found that although the majority of children live in two parent households or sole parent families, 12% of children live in step or blended families, 6% live in multigenerational families and 1% live in families made of other kin.

The 2026 HILDA (Household, Income and Labour Dynamics in Australia) report by the Melbourne Institute provides longitudinal data on the lives of Australian residents. The survey has been following the same 7,862 households since 2001, mapping their lives to understand changes over time.

One widely covered finding in the 2026 release was that half of adults aged 18-29 are still living at home and relying on their parents to provide a roof over their head. This increased from 29% in 2001.

We’re living in an age where children remain dependent on their parents for far longer and more people are living in non-traditional families. It makes asset transfer and inheritance an essential issue that can significantly impact the lives of multiple individuals and the family unit overall.

Mistake 1: Assuming the family will work everything out

Abbey says she often sees people assume that they can leave everything to the new spouse and trust that the spouse will look after the children. Death can expose competing interests that weren’t obvious while everyone was alive.

The surviving spouse may need the family home and enough money to live comfortably while the deceased’s children may want their inheritance.

Those aren’t necessarily opposing objectives, but they can become competing claims over the same assets. “If it goes directly all to the new spouse, it may inadvertently leave no inheritance to the children,” Abbey says.

Mistake 2: Doing nothing

One of the biggest mistakes is also the simplest: not updating the estate plan. A person may have an old will that was written during a previous marriage or before they had children.

That can leave a document that no longer reflects the family sitting around the table today.

“You may have an old will that left everything to the previous spouse,” Abbey says.

Alternatively, the will might leave everything to the current spouse on the assumption that the spouse will eventually pass the money on to all of the children. That assumption can be risky. The surviving spouse may change their will, they may remarry or their financial circumstances may change. They may simply have different views about how their estate should eventually be divided.

The children from the first relationship can end up waiting indefinitely for their inheritance or receiving nothing.

Abbey explains that the most common contests to estates that she sees are from families in this position. A common situation is that Partner 1 who held most of the assets may have died. The assets are transferred to Partner 2 and exclude Partner 1’s children from a previous relationship. Upon Partner 2’s death, the rest of the assets are transferred to Partner 2’s children.

Having an up to date and comprehensive will may lower the chances of costly contests that reduce the size of the estate.

The issue of the family home

The family home is often where the competing interests become most obvious. If the property is jointly owned, it may pass automatically to the surviving joint owner. If the property is solely owned by the deceased, there is no automatic transfer simply because the couple lived there together. The will must stipulate what happens to it.

That creates a difficult question – is it more important for the surviving spouse to stay in the home, or the children receiving the property as part of their inheritance.

Abbey says the answer doesn’t necessarily have to be one or the other. A will can provide a spouse with a right to reside in the property for a period of time, while ultimately passing the property to other beneficiaries.

That might give the surviving spouse the security of knowing they won’t suddenly have to move while preserving an eventual inheritance for the children.

Superannuation

Superannuation can complicate things further because it doesn’t simply operate like a bank account or investment portfolio that automatically falls into the estate.

A binding death benefit nomination can direct a super death benefit to eligible beneficiaries, meaning the money can potentially be paid directly rather than passing through the estate in most states outside of New South Wales.

Abbey says super is frequently overlooked when people put together their estate plans. “People often don’t realise they need a binding death benefit nomination to direct their member balance to the right people.”

This can be particularly important in a blended family because super can form part of the overall strategy for dividing assets. For example, a person might structure their estate so that their spouse receives their superannuation at a beneficial tax rate while children receive other assets such as property, cash or shares from the estate.

That can allow different assets to be allocated to different beneficiaries rather than trying to divide every individual asset equally.

There is an important caveat for Australians living in NSW. NSW has a “notional estate” regime that can, in certain circumstances, bring property outside the estate into consideration when a family provision claim is made. The NSW legislation allows the court, in limited circumstances, to designate property that isn’t part of the estate as notional estate.

While a binding nomination can be an important estate-planning tool, it should not be treated as an absolute shield against a potential family provision claim in every situation. The rules are complex, particularly across different states, so professional advice is important.

It doesn’t have to equal, it has to be fair

Another misconception is that a fair estate plan necessarily means giving everyone exactly the same amount. Abbey takes a different approach with her clients by looking at the needs of the people involved.

She forms an opinion after asking questions such as:

  • How long has the couple been together?
  • How old are the children?
  • Are any children financially dependent?
  • Is someone already receiving financial assistance?
  • Does one beneficiary have a particular need for a particular asset?

‘Who needs what?’ is one of the questions Abbey asks clients. That might mean a long-term spouse receives a larger share than an adult child who is financially independent, but it could also mean carving out specific amounts or assets for children. For example, if one child has lived in a property for 15 years, that property may be more appropriate for them than simply selling everything and dividing the cash equally.

The objective is not necessarily mathematical equality but creating a plan that reflects careful consideration about the circumstances of people involved.

Testamentary trusts can provide another layer

I’ve spoken to Abbey before about testamentary trusts. She says these can be useful where there is enough money involved, a beneficiary has a particular need for protection, or there are taxation considerations.

Rather than simply leaving assets outright to beneficiaries, a will can provide for assets to be held in a trust and distributed according to the terms of that trust. This does not make sense for every family, but there’s value in the trust when the circumstances are complex and the estate size warrants it.

Your estate plan isn’t a set-and-forget document

Perhaps one of the most important points for blended families is that circumstances change, and not just in terms of the spousal relationship.

A couple may have been together for five years when their will was written. Ten years later, the relationship may be much longer, the children may be adults, the family home may have changed and the balance of assets may look completely different.

Abbey says families should expect to revisit their estate plan. “The goalposts will change based on your relationship, the length of your relationship, and the age of the children.”

That means an estate plan written when children are young may need to be reconsidered when they are adults. Similarly, a will written shortly after a second marriage may look very different from one written 20 years into the relationship.

Start with a list

Abbey encourages families who recognise themselves in this article to start with making a list.

  • Write down what you own.
    • Then, work out what your spouse owns. Consider the property, investments, cash, superannuation and other significant assets.
  • Think about the people who matter.
    • Who would need financial support if you died?
    • Who relies on you?
    • Where would your spouse live?
    • What would your children receive?
    • What would you want to happen to the family home?

And importantly, do your current will and superannuation nominations actually reflect those wishes? Abbey recommends checking binding death benefit nominations as part of this process.

Think about what happens if you aren’t there to explain it

There is an uncomfortable reality at the heart of estate planning - you won’t be around to explain what you intended.

Abbey says it makes planning particularly important for people who have already experienced a separation or divorce. If a family dispute occurs after someone’s death, the person whose wishes are being debated can’t step in and explain what they meant.

That is why a conversation about estate planning isn’t simply about who gets what and is more about making the decisions while you are alive when you can explain the reasoning behind them.

For blended families, there may be no single solution that makes every beneficiary completely happy. Abbey says clients don’t necessarily walk away “jumping for joy” after making these decisions because there are so many competing interests to balance.

That doesn’t mean the conversation should be avoided. A fair plan may be better than an absent plan. This plan should be updated to address the changing nature of situations and relationships.

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