Don't Let the Law Define Your Family: A Guide to Wills for Step-Parents and Beyond

A Question of Blood: The Unseen Disinheritance of Australian Step-Children

Who counts as family to you? Is it more logical than biological? If you don't yet have a Will document in place, you're going to want to read this.

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Inheritance Roulette: Are Your Loved Ones Protected if You Don't Have a Will?

In the modern Australian family, our bonds are often forged through love and life experience, not just blood alone. Many of us live in blended families, where the lines between ‘yours,’ ‘mine,’ and ‘ours’ often blur into a single, loving unit of ‘us’. You might raise a step-child from a young age, celebrate their milestones, and consider them your own in every way that matters.

So, it can be a profound shock to learn that if you were to die without a Will, Australian law might treat that child you love and adore, as a complete legal stranger.

• The Key To Understanding Intestacy: In Australia, when a person dies without a Will (or a valid Will), they are said to have died ‘intestate’. And its this legal classification that now dictates the rules to follow when distributing a deceased person's wealth and assets.

In this situation, their wealth, assets and entitlements are not distributed according to their wishes or promises, but by a rigid, predetermined legal set of rules that change by different state and territory laws. These laws, designed around a traditional nuclear family model, can have devastating and unintended consequences for blended families and many other modern family structures.

• Under Australia's intestacy rules, a step-child is generally not considered a 'child' of the deceased for the purposes of automatic inheritance and therefore not an automatic beneficiary.

This leads to a critical legal issue known as ‘Inheritance Erasure' or the way in which these legal statutory formulas can automatically disinherit certain family members, most notably step-children.

The Absolute Exclusion: Why Step-Children Are Left Out

And it's not just step-children who are left vulnerable by these outdated laws. Several other modern family structures face similar risks.

The core of the issue is a foundational principle in Australian intestacy law: the absolute exclusion of step-children from any automatic right to an inheritance. The law is built on relationships of blood (the technical word is ‘consanguinity’) and formal legal acts like marriage and adoption. It does not, and cannot, recognise relationships based on social or emotional dependency, no matter how profound, deep or long-standing they may be.
For the purposes of inheritance, the law recognises two key groups:

• A Spouse: This includes a legally married partner and, in all Australian jurisdictions, a de facto partner.
• An Issue: This legal term refers to the deceased’s direct lineal descendants ie: their children, grandchildren, and so on.

Unless a step-child has been formally and legally adopted by their step-parent, they are not considered an ‘issue’ of the deceased who died without a valid Will Document. They are, for the purposes of intestacy, legal strangers with no claim to the estate. This is the most universal and unequivocal form of inheritance erasure, affecting a significant and growing part of the Australian family landscape.

LGBT Family Units and Intestacy Laws in Australia

For LGBT families, the complexities of intestacy can be particularly acute. While the recognition of same-sex marriage and de facto relationships has been a significant step forward, the law can still fall short. For instance, in families with children conceived through surrogacy or other assisted reproductive technologies, the legal parentage of a non-biological parent may not be automatically established for inheritance purposes without formal adoption.

Without a Will, a child raised by two loving mothers or fathers could find themselves legally recognised as the child of only one, with no automatic inheritance rights from the other. This can lead to heartbreaking outcomes that are completely at odds with the family's lived reality.

People Estranged from Biological Parents Who Have Decided to Go 'No Contact'

The flip side of the coin is equally important. Many people make the difficult decision to go ‘no contact’ with a biological parent due to abuse, neglect, or other serious issues. They may have built a new family of choice, and have no desire for their biological relatives to benefit from their estate.

However, intestacy laws are based on bloodlines, not relationships. If you die without a Will, your estate could automatically pass to the very people you chose to exclude from your life. This can be a deeply distressing thought for those who have worked hard to create a life free from past trauma.

People with Children They Do Not Live With or Have a Relationship With

Life is complicated, and so are family relationships. It's not uncommon for people to have biological children with whom they have little or no contact. You may have adult children you haven't seen in years, or you may not even be aware of the existence of a child from a past relationship.

Under intestacy laws, these biological children are still considered your ‘issue’ and are entitled to a share of your estate. This can come as a complete surprise to your current partner and the children you have raised, potentially leading to disputes and a significant reduction in their inheritance.

Foster Children

Foster children are another group who are completely invisible under intestacy laws. A child may live with a foster family for many years, forming deep and loving bonds. They may be considered a child of the family in every sense except a legal one. However, without formal adoption, a foster child has no right to inherit from their foster parents if they die without a Will. This can be particularly devastating for long-term foster children who have known no other family.

A Potential Legal Safety Net: A Family Provision Claim

The rigid rules of intestacy are not always the final word. All Australian states and territories have legislation, often called Family Provision laws, that acts as a legal safety net. These laws allow certain ‘eligible persons’ to apply to the court for a share of an estate if they can prove that the intestacy rules failed to make adequate provision for their proper maintenance and advancement in life.

In many jurisdictions, step-children and others who were dependent on the deceased are specifically included as ‘eligible persons’ who can make a family provision claim, even though they are excluded from inheriting automatically.

However, this is not a guaranteed solution. It is a potential option for some, not a right. To succeed, a person must:

1. Initiate formal court proceedings, then
2. Convince a judge of their eligibility and their financial need, then
3. Endure a process that is uncertain, costly, and emotionally draining, all while navigating complex ongoing relationships with the biological children of the deceased.

The Only Real Solution: Get your Will document created

The laws governing intestacy In Australia are a fractured and complex patchwork, creating an effective ‘postcode lottery’ where inheritance rights are determined by where you live. The jarring and universal reality, however, is that these laws are fundamentally unable to recognise the nuanced relationships within many modern Australian families.

This highlights a reality for us all: the only way to ensure your estate is distributed according to your true wishes, is to create a valid, clear, and comprehensive Will.

A Will is the only mechanism that allows you to override the blunt instrument of Australian intestacy law.

It empowers you to provide for your partner and spouse, ensure all your children are treated as you intend, and, most importantly, to make specific provisions for loved ones, like step-children, foster children, or friends and family of choice, who the law would otherwise completely ignore.

Australian Intestacy law is simply not equipped for our modern Australian family life. The only answer to have a professional Will document set up today, just in case tomorrow is not what you expected.

Sapience Financial regularly works with folks who want to protect and provide for their they love, both inside and outside the traditional family structures. Call us for a discrete conversation about your situation.

Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn.  Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.