Blended Families and Property Ownership

Jun 7, 2021

There are 6 million families in Australia[1]. Of these families:

  • 90% with children consist of at least one child who is the natural or adopted child of both partners in the couple.
  • 6% are step-families. That is, where one person is a step-child but there is no child who is the natural or adopted child of both partners.
  • 4% are blended families. These are families where there are at least two or more children, one who is the natural or adopted child of the partners and at least one who is a child or step-child of one of them.

With the next Census due to take place this August, the percentage of blended and step-families is likely to increase.

If you are a part of a blended family, there are additional risks to consider when planning your estate.

If you are entering a subsequent relationship and have children with your previous spouse or spouses, it would be prudent to consider the manner in which you own real property with your new partner. This is a one of the several methods utilised to ensure that you protect your assets.

If you purchase a home with your new partner, you can own property as either ‘joint tenants’ or as ‘tenants in common’:

Joint tenants: if you own a property with your partner as joint tenants, you both have a 100% interest in the property at the same time.

Further, the ‘right of survivorship’ applies. For example, this means that if Alan and Eva own a property as ‘joint tenants’, if Alan dies before Eva, Eva will own the entire property as the survivor of Alan and Eva. Alan cannot give his interest in the property away through his Will.

Tenants in common: if you a property with your partner as ‘tenants in common’, you co-own the property in defined shares and each of you are able to dispose of your share in the property inter vivos or through your Will.

For example, Barry and Terry own a home as tenants in common in equal shares. Barry can dispose of his 50% share in the property to anyone through his Will including his children from any previous relationship.

Due to the ‘right of survivorship’ which applies in the case of a joint tenancy, property owners in a subsequent relationship will generally own their property as ‘tenants in common’ so that they can control how their interest in the property is disposed of through their Will. However, it is important to keep in mind that if your children become ‘owners’ of your share, they will be co-owners with your spouse. This may lead to complications if one party intends to sell their interest and the other does not.

Further, any disposition through your Will can be disputed. ‘Eligible persons’[2], which can include a spouse, child or stepchild, amongst other people, can make a claim on your estate for further provision (Part IV Claim).

If you are in a blended or step family, it is important to seek legal and tax advice to understand the best manner of ownership for you and the effect it has on your estate planning.

If you need assistance with your estate planning, please contact Kimi Shah.

Other articles in this series:

Blended Families and Life Interests

Blended Families and Family Trusts

Blended Families, Superannuation and Life Insurance

[1] From statistics gathered in the 2016 Census.

[2] Part IV of the Administration and Probate Act 1958.