Step (child) on** ... and the list of people entitled under an estate

 

Last week's post considered some of the key issues, from a will drafting perspective, about whether a step child is entitled under a deceased estate.

The case of the Superannuation Complaints Tribunal in D19-20\023 provides a useful explanation of the wider position at law in relation to step children, including from a superannuation perspective.

In summary the decision confirms:

1. There is some support for the position for general law purposes, and in particular family provision (or testator family maintenance applications) that someone does not cease to be a ‘step-child’ of a person when their natural parent pre-deceases the person, if the marital relationship between their natural parent and the person was in place at the date of the natural parent’s death (see Scott-Mackenzie v Bail [2017] VSCA 108).
2. That is, the relationship of step-parent and step-child is one of affinity and does not cease merely because of the death of the natural parent. In other words 'once a step-child of the deceased, always a step-child of the deceased (providing the relationship of the deceased with the natural parent was not earlier dissolved otherwise than by death)'.
3. In contrast, there are also cases that conclude the relationship of ‘step-child’ ceases automatically on the death of the natural parent (see Re Burt (1988) 1 Qd R 23, Re Moreton (1996) 2 Qd R 174, Basterfield v Gay (1994) 3 Tas R 293 and Connors v Tasmanian Trustee Limited (1996) 6 Tas R 267).
4. For superannuation purposes, historically the Tax Office is on record as holding that a child only remains a stepchild while the relevant parents are a couple, for example see ATO ID 2011/77 where it was decided that a person ceases to be a 'stepchild' for the purposes of being a 'dependant' of the member under regulation 6.22 of the superannuation regulations, when the legal marriage of their natural parent to the member ends.
5. There is however support for the broader concept of ‘step-child’ - that is a relationship of affinity between the step-parent and step-child that can continue beyond the death of the natural parent.
6. In the factual matrix here, the Tribunal was satisfied that the step-daughter and the deceased member continued to have a sufficiently close relationship after the earlier death of the spouse of the member (who was the natural parent of the step-daughter).
7. As a result the natural daughter of the spouse of the member remained the step-child of the deceased member and in turn fell within the definition of ‘child’ at the date of the deceased member’s death. Therefore she was a ‘dependant’ for the purposes of both the trust deed of the fund and the superannuation legislation.

As usual, please make contact if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the Happy Mondays song ‘Step On’.

View here:

Is there anything (stepchildren) can do** to challenge an estate?

Like many areas of the law, the ability for a disgruntled beneficiary to challenge the provisions of an estate plan depends on a range of factors, not least of which the state where the willmaker lived.

This is because each Australian jurisdiction continues to have unique rules in relation to succession legislation, and in particular, the rules that regulate the ability for eligible beneficiaries to make an application for further provision.

What is consistent in each jurisdiction is that there are rules regulating the category of persons who have standing to bring an application.

One stark example in this regard relates to the ability for stepchildren to challenge a deceased estate.

In broad terms, there are three different regimes that apply.

In summary, these are as follows:

1. if the stepchild is wholly or partly dependent on their step parent prior to the date of death, then in South Australia, Western Australia, Australian Capital Territory, New South Wales and the Northern Territory, the stepchild may have standing;
2. if a moral responsibility can be demonstrated, then in Victoria a stepchild may have standing; and
3. so long as the natural parent and the step parent are married at the date of death, then the stepchild would automatically have standing in Queensland.

In Tasmania, stepchildren have no ability to challenge their step parent’s estate.

** For the trainspotters, the title of today's post is riffed from the Go Betweens song ‘Was there anything I could do’. View here: