Jacqui Brauman on Blending Legacies: Estate Planning for Blended Families

Jacqui Brauman: Even convincing someone to do estate planning when they feel like it’s so far away in their future, or it’s just too hard. Sometimes you’re just pushing a rock up the hill, but then you can start feeding them. Some of the horror stories

Laura Jenkins (00:15): In The Blend is a podcast series that helps parents navigate life within a blended family. Join me as I speak with experts and guests to get practical advice on how to have a harmonious, blended family life. This series dives deep into the unique dynamics, logistics and challenges of raising a blended family. From new partners to juggling mixed finances, we will help guide you through it.
(00:43):
Welcome to another episode of In The Blend. In today’s episode, we delve into an essential topic for blended families estate planning. Join us as we sit down with a special guest, Jacqui Brauman, a seasoned Wills and Estate lawyer with expertise in navigating the complexities of estate planning in blended families. We explore the unique considerations and challenges that arise when it comes to blending legacies during our chat and cover all of the things, including wills, trusts, and super. Jacqui shares her wealth of knowledge and offers valuable guidance on how to protect and provide for your loved ones in a blended family setting. And importantly, how to broach those sometimes difficult conversations. Whether you’re a stepparent, biological parent, or stepchild, if estate planning is on your to-do list, this episode will equip you with the information you need to either get started or hopefully serve as a good reminder that it might be time to refresh what you have in place. Welcome Jacqui.

Jacqui Brauman (01:47): Thank you.

Laura Jenkins (01:48): Thank you. Thank you very much for joining me today. Very excited to have a chat with you. Jacqui, you an incredibly accomplished lawyer. You’re an accredited specialist in Wills and Estates. You’ve written books and you’ve established your own firm as well. Clearly, very immersed in the space and absolutely thought you were the person for the job when I came across your profile in terms of chatting with me for this episode. Jacqui, I’d love to start with what inspired you to specialise in estate planning and what are some of the unique challenges that arise in this area of law?

Jacqui Brauman (02:25): Well, a number of things I think sort of pushed me more into this direction than not. But in particular, I usually share a story, which was sort of almost the thing that pushed me over the cliff into the area. I had a friend a few, a few years ago now, it’s a long time ago now, who was working in the prosecutor’s office, and she told me about a prosecution that was coming up for sentencing. There’s a lady who had run a red light and there was no drug and alcohol involved. She just randomly ran a red light and killed a couple who were crossing the road. So the sentencing was coming up for this lady and there’d been victim impact statements done. This was a young couple who’d come down to watch the AFL from Sydney for the weekend on holiday, and they’d left young children at home.
(03:24):
They had no wills and so suddenly dead and the last 18 months since the actual accident, those children had been in and out of the family court multiple times because the respective grandparents on either side of the family didn’t like each other and were fighting over the children and fighting over the money. And I just thought for such a tragedy to then just be prolonged, these children are just having the most horrendous upbringing, which could have been solved so simply. And I think particularly for, you know, people in their thirties and forties who are like, “ah, you know, I don’t really have much assets, and don’t really want to think about the worst case scenario”, well, you know, your children are, you know, the most important things in your lives hopefully, and that’s worth doing a will alone. So instead of focusing so much on the 50, 60, 70 year old sort of categories, I really wanted to focus on those thirties and 40 year olds who just need that extra push.

Laura Jenkins (04:30): Hmm, fair enough. Well, that, that would’ve been a, a good impetus. So did they, did they come to you in that, in that circumstance, the family members?

Jacqui Brauman (04:41): No, not at all. So I wasn’t involved in this case whatsoever. It was just that my friend was prosecuting it. And so I heard the story and you know, of course in practice I had had people disputing will and had various things arise, but I’d never dived really deeply into actually doing really good estate planning in the first place to prevent some of the things that I was seeing happen later. And I just, it was as well as thinking that young people need to do a better job of doing their wills. It was also, well actually the estate planning process needs to be done far more holistically as a whole as well. You know, trying to keep families together after the fact instead of unfortunately there are a lot of lawyers out there who do really cheap wills just so that they do get the estate and potentially the estate dispute later. That’s almost a business model that they do fairly poor work upfront to charge more later. Just doesn’t sit well.

Laura Jenkins (05:44): Got it. So for blended families in particular, what are some of the key considerations when creating a comprehensive estate plan that’s gonna ensure fair of assets and ideally protect everybody’s interests?

Jacqui Brauman (06:01): There are so many factors, and of course each family is unique and I think it certainly depends on when the couple came together, how long the relationship has been, how old the children were. Some of the pers individual personalities have to factor in as well because of course, particularly as children get into adulthood some children may be more litigious and forceful than others, or even once they have spouses, those spouses may be the force behind a dispute. And then also how they’ve combined their assets or if they have combined their assets. And then of course there are some assets that are what we call non-state assets, so assets that aren’t covered by your will. And we can sometimes tweak non-state assets potentially to provide some funds upfront for children so that they feel like they get something. But it’s so unique for each family. It really is taking into these factors family by family. And also of course when the, the couple comes to us also how strongly they feel as well about well actually now my priority is my spouse or well, no, my priority is such and such. So even just factoring in their own sense of their moral obligation is very important as well.

Laura Jenkins (07:41): I know it’s not, it is not an easy one to navigate at all. I can imagine. There’s so many different variables. One of the things I’m thinking about is how parents can balance that desire to provide for their own biological children. And then in the event they’ve got stepchildren as well, how they might go about acknowledging and, and supporting their stepchildren as part of their estate plan. Have you, have you got any examples of how clients might tackle that?

Jacqui Brauman (08:14): Yeah, a couple of examples. And one is using a non-estate asset, which I was talking about before, like superannuation. So say we use a scenario where a new couple – well no, they don’t even have to be a new couple. So a couple comes to me and they do want to pretty much leave everything to their spouse. However they want their biological children to get something else directly from them. We can potentially use the super to do that. So most of the time your super is not covered by your will. So we can nominate on the Superfund who can get the superannuation directly, and that can’t be disputed if it’s a binding nomination. So we can nominate the biological children on that superfund and you know, that can’t be undone that goes direct to the children. So they get something immediately on the death of their biological parent. And then the assets of the relationship because this couple is still building wealth together can stay with that spouse, but the kids have had something already.

Jacqui Brauman (09:34): The other thing that is often done is particularly later in life when a couple comes together and their kids are already adults and there’s already some wealth that they’ve built up and they end up coming and combining a household instead of owning that house jointly, we can have them, so they own the house as tenants in common, which means they each own 50% and send then in the will, they can say, well, although my spouse can continue to live in the house for the rest of their life, the my children will actually own my half after I pass away. So it secures them at least to get half of their equity in that house. But it also secures their spouse to have somewhere to live. So that can be another way of balancing. So those are often the primary two ways that we start looking at balancing different obligations.

Laura Jenkins (10:36): Got it. I’d heard of the tenants in common scenario before, but not the super. That’s interesting. Yeah. And in the situation where there’s stepchildren and biological children, if you had the tenants in common situation, it’s then at the discretion of the individual to decide which of the children they want to leave their half to. Is that correct?

Jacqui Brauman (10:59): Absolutely. That’s absolutely right.

Laura Jenkins (11:03): Yeah. Got it. Communication is something that I imagine needs to be very clear and open when it comes to estate planning and end of life wishes ideally, and easier said than done, I imagine depending on scenarios and all sorts of different dynamics. Yeah. What are some strategies for facilitating these types of discussions?

Jacqui Brauman (11:31): Hmm. well we do have a much more sort of collaborative approach that we can take if we know that particularly in families where there is a lot of wealth and there’s a lot of personalities and potentially some of the children already involved in some of the family business or assets or whatever, it’s worthwhile actually doing more of a full conference and actually having the children come in and do either we can do it as part of a collaborative process. And I can explain that in a minute too for you if you like, but even just to put together a deed of family arrangement to say that, well, this is the intention for this succession here are all the steps that have to be involved to make sure that that happens. And then have all the children sign off on that as well.
(12:33):
So I’ve done that quite a few times, particularly for farming families because they have a lot of a lot of very valuable assets, but not much cash. So then they have to work out, well, how are we going to divide this up? But then the collaborative process could also be used, which is if the children actually feel like they also need their own legal advice then we’d prefer to have a practitioner who is collaboratively trained and actually come together more like a mediation and have someone actually be able to provide some guidance for proper communication so that things can be said that need to be said. And also that can provide an independent neutral party rather than just the lawyer, because children can be a little bit intimidated just being told how it is by the lawyer for their parents.
(13:36):
So if they feel like they also have their own representative, but it’s a neutral party that’s sort of running the show, that can be a really good way of doing it. So those are a couple of really formal processes. However, for the majority of families, and this is even for families that aren’t blended families, particularly when children are adults, I say to people, the reason why there is a dispute in the will is because someone gets a surprise. They’re disappointed and it’s not what they expected. So you do actually need to be very clear and tell people what you intend. And I often even suggest that they use me as the scapegoat or their lawyer and say, “look, we’ve just had an appointment with our lawyer, we’re redoing our estate planning. This is what we’re going to do and we’re doing it because this is what we want to achieve. And our lawyer said it’s the best way to do it”
(14:29):
So yeah. Instead of them then taking the brunt of why they’ve made the decision, in fact, a third party, which is me, which they can blame all day, like, because I don’t mind, takes the brunt of any angst that they might have about it. And of course then they need to absorb that information, like if you landed on them, landed on the kids, and then expect them to be all happy and rosy about it straight away, that might be a bit false as well. Like just let them have some time to think about it and then process and perhaps again, have a a, a second conversation or ask them again how they feel about it. But at the end of the day, it’s not up to how the kids feel about it, it’s what the parents want to do. It’s what they’ve decided sits best for them and they should really just be telling them, telling the children what’s happening. And as I said, once it’s actually absorbed and the kids understand the reasoning behind it, quite often they will respect that wish because they know about it upfront. As I said, it’s usually the surprise that’s the worst.

Laura Jenkins (15:40): That’s so true. And I love the idea of, of couching that conversation with, “Hey, we’ve just seen the lawyer, we’ve had this advice”. It’s a nice soft way to deliver that message.

Talk to me about trusts, Jacqui. What role do trusts play in establish in estate planning for blended families, and how can they be used to provide for stepchildren or protect assets for future generations,

Jacqui Brauman (16:13): Well, there’s a few creative ways that we could deal with trusts and I mean this goes for, for all families as well. For example, particularly if one set of children are a whole lot older than the other set on the other side. And both parents want to make sure the younger children have the same opportunities that the older ones have already had. You might use a trust, for example, for the education of the younger set of children. So a portion of the estate doesn’t get distributed until the education for the younger children is provided for and then it gets redistributed after that has happened. So that’s a creative way of doing things. Again, looking at some form of life interest is a form of trust as well. So saying, well, I want to make sure that my children are provided for, but I also want my spouse to have everything that they can during their life.
(17:22):
So whether it’s a life interest in real estate or if it’s a life interest in much more of the estate, because you could even leave a life interest to the whole estate and say my, my spouse can have everything that I have but only for life. It doesn’t become theirs outright and then it does come back to my own children. So that’s a way of using a trust as well. And then I suppose discretionary trusts are, when people talk about trust, they’re often thinking about a testamentary discretionary trust. But at the end of the day, a discretionary trust doesn’t have percentages in it. So you have to think about what percentage am I putting there in there in the first place and who the beneficiaries are going be. So yes, you could say the beneficiaries are only biological or you could say no beneficiaries are all children, including stepchildren.
(18:19):
And that’s also even thinking about the next generation as well. So being really clear about who the beneficiaries of a trust might be, but as I said, you’ve already have have to have thought about, well what percentage are you going to put in there anyway? So I suppose there’s, there’s quite a few creative ways we could do it. The other creative thing you could do is instead of having a trust in a will is actually setting up some trusts while you’re alive. So just like I was talking about with the family farming families that I’ve helped, we often establish a couple of farming property trusts before the parents have passed away and move specific pieces of land into trusts. We can do that for farming land because we can do it without stamp duty, whereas other investments you can’t. So we’re lucky in terms of farming. So then we would move a whole lot of assets during the parents’ life. So they’ve actually controlled that already and then set up the succession in the trusts so that it doesn’t even come through the will. It’s already done, it’s already ple pre-planned and it’s got conditions built in so we can do things that way as well.

Laura Jenkins (19:36): Got it. Okay. If you’ve got blended families who might be hesitant to engage in any form of estate planning, what do you do, or if they’ve experienced conflict around these issues in the past with a previous relationship. Any tips?

Jacqui Brauman (19:58): Well, it’s again, just like I was talking about at the very beginning, like even convincing someone to do estate planning when they feel like it’s so far away in their future or or it’s just too hard. Sometimes you just pushing a rock up the hill and it’s not our place to convince them except, but then you can start feeding them some of the horror stories. So sometimes it is that they’ve had someone else die in their life and they’re hearing about how difficult it is for that person because there hasn’t been a will done. So sometimes it is fear ultimately that pushes people to do it instead of the thought of actually being proactive. But on the flip side, it is also about those of us who can try and educate as much as possible, the importance of telling people what you can do, what your options are.
(21:00):
But trying to also have a process where people can go through it without feeling overwhelmed. Because I think so many people don’t take the step initially because they do feel like it’s all too hard to make these decisions. However, when I get into a process with a couple I completely guide them through, they don’t have to have all the decisions made before they come into me. And I’m not going to overwhelm them with all this information either. I’m already processing what I think is best for them and guiding them through step by step. So I mean, hopefully once people start going through the process, they’re so relieved that actually this was so easy, why did I leave it for so long? And then that word of mouth sort sort of rolls out to others, but when people are just think that it’s too hard, that is a mental block that, you know, we can’t necessarily always solve for them. So yeah.

Laura Jenkins (22:02): That’s true. It is one of those things that you think about and know you’ve gotta get to it and it feels like a great big project. But that’s, that’s the benefit of, of enlisting and professional support As well to help navigate some of the complexities of your personal situation and get some recommendation on what’s going to be the best solution for you.

Jacqui Brauman (22:25): That’s exactly right. And we don’t want to make it a bigger process that you, than you already think it is in your head. So in fact we want to make it as easy as it possibly can be for you to get through to the other side and yes. Cross that thing off the list of things to do. Cause it’s been on your list for a while.

Laura Jenkins (22:46): Yep. Are there any recent changes or developments in estate planning laws that, that blended families in particular should be aware of as well, Jacqui?

Jacqui Brauman (22:57): Not necessarily for wills, no. Quite a lot of states over the last five years or so have done a lot of work around firstly protecting defactos and secondly around powers of attorney more so than wills. So there’s been a lot of changes. There’s been a lot of research into elder abuse and making sure that the laws around powers of attorney and are very clear and that there are now penalties for attorneys not doing the right thing and following their duties. And certainly around medical decisions as well. Particularly in Victoria because we had the introduction of the assisted suicide legislation. So I suppose for blended families as well as thinking about your wills, it’s also important to think about who you are giving powers to to make your medical decisions and decisions if you’ve lost capacity.
(24:06):
Because again, if you’ve got adult children and they don’t feel like they have any say and it’s it’s your new spouse that could potentially make things really hard for your spouse in an already difficult time. And around medical decisions if, if you do appoint your spouse, and again, you’ve got adult children who are gonna be fairly sort of forceful vocal personalities, also leaving detailed instructions about what you’d want for your medical care would be really helpful because then your spouse has that in your handwriting as a backup because you can imagine how difficult it would be with your spouse making decisions about your medical care with your children denying that that is what your wishes would be. So thinking about those things and then also around powers of attorney for your financial and legal matters I guess the people to appoint in those roles, I generally recommend you have the same people as your executors in your will.
(25:13):
So really thinking again about how the personalities play together and who would work well together, but then who also has a more controlling personality, so perhaps factoring that in as to how they need to be making decisions. I think that that’s, that’s also really important. So otherwise, no major changes around laws for wills with de factos. Because over the last 10 years we’ve gradually be been having the increasing rights of de factos being recognised, particularly in family law as well. It’s now very clear that it is a de facto is someone who has crossed a threshold of a relationship of two years, but then again, how to actually define what the two, what the two years has consisted of to be a relationship is also another problem. And I have tried to help a couple of women through over my career who have had long relationships with men in their life who haven’t necessarily disclosed that to their adult children and the difficulties that that can involve as well. So at least those those arrangements I suppose have had some level of boosted security than they used to.

Laura Jenkins (26:51): Got it. That’s interesting. It’s a really fascinating space, the power of attorney, endurining power of attorney and I wasn’t certain that you could appoint a different power of attorney for health versus financial as well. So that, that’s good to know. I like the idea as well of having the individual write down their wishes while they’re of sane mind. So that, that makes things easier in the, in the longer term as things play out.

Jacqui Brauman (27:24):
Yeah, that’s right. Because the last thing you’d want in that stressful situation is to also be battling with your, the surviving fa the other family members around you. Yeah. yeah, we want to reduce stress as much as possible, make things as simple as we can.

Laura Jenkins (27:39): Definitely. Jacqui, we’re almost at time here just just before we finish up, I wanted to ask, if someone is sitting there with this on their to-do list thinking it’s all too hard, what would you suggest they do as their next step?

Jacqui Brauman (27:56): So, I mean, if, if you feel like you’d be really comfortable with me, that’s great, but I think being comfortable with the lawyer that you’re gonna use is almost the most important step. So finding the right lawyer to work with, I think is probably your biggest hurdle. Because once you’ve made an initial appointment and you start the process, you’re gonna be guided through it, but you actually need to find someone that you’re happy to start the process with. So yes, do some research. Don’t just select the lawyer in the closest suburb to you. You really want to be looking around. If you want someone who’s an accredited specialist, you can find an accredited specialist in your state through your state law law institute or law society. They have a list of accredited specialists. We can do most of this stuff via Zoom so you don’t have to actually physically sit down with someone.
(28:54):
And then once you’ve got a bit of a short list of people that you have been suggested, look on their website, see if you can see their face, see if they’re actually putting out some information on their website about what to do to help guide you through, see if they’ve got somewhere where there’s a podcast or some video or something where you can hear them talk and see if you’re comfortable with how they communicate. Because if you can’t trust and you’re not going to be comfortable with the person you’re working with, the process is not going to be as smooth and easy as it could otherwise be. So I think that that’s the very first step. Find someone that you can feel comfortable with and then just really allow them to guide you through.

Laura Jenkins (29:37): Fantastic. Thank you Jacqui. And we’ll link to those, those couple of sites in the show notes as well. Jacqui, where can people go if they’d like to connect with you or, or reach out?

Jacqui Brauman (29:49):
Yeah, thank you. So the firm that I own is TBA Law, so the website’s probably the best place to start. It’s just tbalaw.com.au. Or our Facebook page is actually very active as well. So you can find our Facebook page @Tbalaw. We’ve got hundreds of videos on there. And so if you are looking for a bit more information upfront, have a look through all those videos and then you can feel much more prepared that way as well.

Laura Jenkins (30:15): Fantastic. Thanks so much Jacqui. Really appreciate your time.

Jacqui Brauman: Pleasure.

Thanks for listening to the In the Blend podcast. The show notes for this episode are available at intheblend.com.au. And if you like what you heard, be sure to subscribe and please rate and review in your podcasting app. You can also follow me on Facebook, Instagram, and LinkedIn.

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