A successful businessman remarries in his sixties. His second wife is twenty years younger. His children from the first marriage are in their thirties and work in the family business. Everyone is polite at dinner. When he dies, the estate has to provide for a widow who may live another forty years and for children who expect the business and the family home. Under Australian law, both sides may be entitled to ask a court for more.
This is the most common pattern behind estate disputes in wealthy families, and much of it can be planned for.
Where it goes wrong
- The will that leaves everything to the spouse. The spouse can then make a new will leaving it all to their own children or family. The first family’s inheritance depends on goodwill.
- The will that leaves everything to the children. The surviving spouse brings a family provision claim. In Victoria, a spouse or domestic partner at the date of death is an eligible applicant, and courts take a widow’s need for housing and income seriously.
- Joint tenancy. The family home passes automatically to the surviving joint owner, whatever the will says.
- Superannuation and life insurance. These are paid by fund trustees, often to the spouse, outside the will.
- Marriage revokes a will. In Victoria, a will is revoked by marriage unless it was made in contemplation of that marriage. Many remarried founders are running on an old will that no longer exists.
Tools that work
- A life interest or right to reside. The spouse lives in the home, or receives the income, for life. The capital then passes to the children.
- A testamentary trust with an independent or professional trustee who balances the two families.
- Binding financial agreements under the Family Law Act, made before or during the marriage, to set expectations on both sides.
- Aligned super nominations and ownership. Decide which assets go where and make the paperwork match: severing joint tenancies, updating nominations, and keeping company and trust control in line.
- A clear record of reasons, signed with the will, explaining the provision for each family.
A word on fairness
No plan stops every claim, but a plan that provides fairly for both families makes a claim far less attractive and far easier to settle. Unfairness, or the appearance of it, is what fuels litigation.
Frequently asked questions
Can a second wife contest her husband’s will in Victoria?
Yes. In Victoria, a person who was the deceased’s spouse or domestic partner at the date of death is an eligible applicant for a family provision claim. The court considers whether the will made adequate provision for their proper maintenance and support, and it takes a surviving spouse’s need for housing and income seriously.
Does getting married cancel an existing will in Victoria?
Generally, yes. In Victoria, marriage revokes an existing will unless the will was made in contemplation of that marriage. Anyone who remarries should review their will promptly, because an old will may no longer be valid and the estate could otherwise pass under the intestacy rules.
How can I provide for both my spouse and my children from an earlier marriage?
Common tools include a life interest or right to reside in the home for the surviving spouse, with the capital later passing to the children; a testamentary trust with an independent or professional trustee; binding financial agreements; and aligning superannuation nominations, joint tenancies and company control with the will, supported by a signed record of reasons.
Does a jointly owned family home pass under my will?
No. A home owned as joint tenants passes automatically to the surviving joint owner, whatever the will says. If you want your share to pass under your will, for example to children from an earlier marriage, the joint tenancy generally needs to be severed so that the owners hold as tenants in common.
Chua Tan Associates advises families, executors, trustees and their professional advisers on estate planning, estate administration and estate disputes, in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal advice. Victorian law unless stated otherwise.
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