This weekend the Sunday Star Times ran an article about estate planning gone wrong. There were a number of major issues with the situation — all of which are especially pertinent for blended families. Are you in this situation? Do you have clients or friends who you should share this with?

So, where did this family go wrong?

1. The mother did not make a Will. Despite being sick she trusted her partner to “do the right thing by you kids”. Although his comment at the end of the article would indicate that the family was not as harmonious as the mother might have thought.
2. Apparently she had drafted a Will but it was never signed. Signing your Will is VERY important. While there are cases where an unsigned Will has been to be probated, this is costly and time-consuming to make happen, and could have an uncertain result.
3. It is unclear, however, if the ‘family’ home was jointly-owned, which means that the surviving partner inherits the full property and the mother’s share does not become part of the estate — so, the children are not entitled to it. Having the property owned ‘as tenants in common’ would have meant that her share of the house would have formed part of her estate.
4. When someone dies without a Will, this is called intestate, surviving partners are entitled to the first $155,000 of an estate and one-third of the balance. But what forms part of the estate? Jointly-owned houses do not, joint bank accounts do not, life insurance where the partner is the owner of the policy does not, and most of their furniture does not.
5. The two-third share of the estate the children inherited should have been held in trust for them until they turned 20. Clearly this was not done.
6. The partner did not get proper legal advice; the internet is not proper advice.
7. He is personally liable for his mistakes, so the bankruptcy proceedings may a good chance of success, though it would appear that this action is not going to get the children very much money at all.
8. He has used the money for a good time, not a long time.
9. With a great Will, she should have also had a Trust.

So I ask you again, are you putting your family in this situation? Do you have friends or clients you should be sharing this with? This is not an online Will — blended families need to have full advice.
 

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