26 Feb 2013

STEP-CHILDREN & ESTATE PLANNING – MAJOR CHANGES TO THE LAW

In Western Australia, long awaited amendments to the law to allow step-children to claim against the estate of a deceased step-parent are finally operative. Let the family feuds begin.

Whether parents actually want their step-children to have all of the legal rights of natural children, or maybe view it as a step (pardon the pun) too far, the new regime has arrived. The modern WA family will never (legally) be the same again.

For many years, each State has had legislation allowing spouses, children, parents and in some cases, former spouses or grandchildren, to challenge a Will.

But the step-children? As common as they are, their legal rights have been completely inferior.

This has long caused angst because the relationship of step-child and step-parent may be as close, or sometimes closer, than the relationship between parent and natural child. Regardless, the right of step-children to litigate for a ‘fair share’ was virtually non-existent.

On the other hand, for centuries it has been argued that blood will always be thicker than water. As old fashioned as that might now seem, it is a fact that not all blended families are an example of domestic harmony.

Whatever your personal view, perhaps the most important point is that the new laws are here to stay. Estate planning and Family Law must quickly consider a range of new issues and consequences. All children – biological or otherwise – now have the same inheritance rights.

Or do they?

In the traditional law making spirit of avoiding simplicity, if the legislation is examined, it becomes clear that while the amendments confer legitimacy on claims against an estate made by a step-child, Parliament has not made children ‘equal’. Step-kids may only claim in specific circumstances and only in cases where the deceased died after 16 January 2013.

Parliament could simply have amended the definition of “child” to include a step-child and enabled the Court to exercise discretion in relation to such claims, but it has deliberately chosen to limit the opportunity to bring such claims. This means complex Wills drafted by specialists will be able to lessen the impact of the changes.

In conclusion then, financial planners, accountants and lawyers all need to ensure that blended family clients have their estate plans in order. While Parliament has made it clear that total equality was not the goal, the evolutionary process is well under way and parents need to adjust.

Or at least their Wills do.

See Janene Bon and Bernadette Duell of the HHG Wills & Estate Planning team to update your Will today.

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