Estate planning is often filled with intricate challenges, particularly when it comes to anticipating potential outcomes that may arise during the drafting of a testator’s will. A testator has the freedom to allocate their assets as they see fit, whether that be to family members, friends, or other beneficiaries. However, if the testator wishes to exclude certain family members, such as stepchildren the drafting process requires strategic consideration and care.
Traditionally, testators tend to leave the majority of their financial assets to their biological children, believing in the idea of intergenerational wealth transfer. There’s often an inherent desire to see their blood relatives financially succeed, as well as a natural inclination to favour those they have the closest relationships with. However, with the rise of blended families, the dynamics of estate distribution can become more complicated. Blended families those in which one or both partners have children from previous relationships have become increasingly common in recent years. According to the Australian Institute of Family Studies, the proportion of blended families began to rise in 2021 to 12%, with the number of intact families declining slightly. It’s now more typical for people to welcome stepchildren into their homes, forming close bonds that often feel “blood related.”
Yet, when a parent passes away, stepchildren are not automatically entitled to inherit from the deceased, despite these close familial ties. This exclusion can be profoundly distressing for stepchildren, who may feel overlooked or undervalued in comparison to the biological children of the deceased. In such cases, it’s possible that a stepchild may contest the will and make a claim on the estate. A stepchild is defined as the child of the testator’s spouse, either biological or adopted which excludes them from the definition of the “testator’s child” under the Succession Act 2006. However, this does not mean they cannot make a claim. For a stepchild to contest a will, they must demonstrate two key criteria:
1. Dependency: The stepchild must have been financially dependent on the deceased. This dependency needs to be more than minimal and typically involves financial support such as rent-free accommodation, groceries, or other living expenses.
2. Cohabitation: The stepchild must have lived with the deceased at some point in the past. Although they do not need to be living with the testator at the time of their death, the length and nature of their cohabitation will influence the strength of the claim. The longer the period of cohabitation, the more weight the claim may carry, although there is no set statutory minimum for how long this cohabitation must have lasted.
When assessing such claims, courts will focus on several factors, including the stepchild’s dependency on the deceased, the length of their cohabitation, and their current financial situation. Other considerations may include the relationship between the stepchild and the deceased, the stepchild’s financial circumstances (such as whether they are bankrupt or in debt), and any contributions the stepchild made to the deceased’s estate. For example, if the stepchild helped with major renovations to the deceased’s property or provided significant financial or emotional support during the relationship, these factors could also be relevant. Testators who do not wish for their stepchildren to receive provision under their Will can prepare a Section 100 Statement to help minimise the risk of a claim being successful. In this statement, the testator should provide clear and reasonable explanations for excluding the stepchild, referencing relevant factors as aforementioned.
The case James v Rost; Langan v Rost [VSC 98] confirms that adult stepchildren can successfully bring a claim against the deceased estate if the Court finds that they were not adequately provided for. In this matter, two adult stepchildren contested their stepmother’s estate, arguing that she failed to make any provision for them in her Will. Instead, she left the entirety of her estate to her biological daughter and grandson. The main asset of the estate was a property that had been jointly owned by the stepmother and the stepchildren’s biological father. Upon the father’s death, ownership of the property automatically transferred to the stepmother as the surviving joint tenant. This meant the stepchildren had no legal claim to the property at the time of their father’s passing. The Court took this into account and ultimately found that the stepmother had not made adequate provision for the stepchildren. It was deemed unfair that the property was left solely to her biological daughter, excluding the stepchildren entirely.
The leading case Brown v Brown [NSWSC 1393] illustrates the challenges stepchildren face in making a successful claim when the stepparent and biological parent have separated prior to the stepparent’s death. In such circumstances, it is often difficult for a stepchild to establish the necessary elements of a continuing relationship and dependency, among other relevant factors. In this case, an adult stepson brought a claim against the estate of his deceased stepfather. Although the stepson had lived with the stepparent during his teenage years, the Court found that this past cohabitation alone was insufficient to justify provision from the estate. The lengthy period of no communication between the stepson and the deceased played a large role establishing no existing relationship at the date of death. His Honour held that the stepson was not eligible for provision. It’s also important to note that time limits apply. A stepchild has one year from the date of the deceased’s death to contest the will. If they miss this deadline, they may apply to the court for leave to file their claim, but there is no guarantee that the court will accept the late claim.
In the realm of estate planning, it’s crucial to understand that the dynamics of modern families can complicate the distribution of assets. For stepchildren, navigating the legal landscape of inheritance can be a challenging and emotional process. For testators, it’s important to consider how best to address these complexities in their will to avoid future disputes and ensure their final wishes are carried out.