Why Estate Planning is important for young families-Part One

For young families in New South Wales, estate planning is often viewed as something to “get to later” — after building more wealth, buying a larger home, or once children are older. In reality, it is most critical when families are young, financially stretched, and raising dependent children.

1. Protecting minor children

The most compelling reason to estate plan is guardianship. If both parents die without a valid will, there is no automatic legal rule determining who raises the children. The Supreme Court of NSW ultimately decides guardianship, potentially triggering family conflict and litigation.

A properly drafted will allows parents to appoint testamentary guardians under the Succession Act 2006, ensuring children are raised by the people they trust most. This is not simply a financial document — it is a parenting decision made in advance.

2. Avoiding intestacy under the Succession Act 2006

If a parent dies without a will, their estate is distributed according to rigid statutory formulae. While spouses and children are prioritised, the structure may not reflect modern family realities — blended families, estrangement, business interests, or unequal contributions.

For example:

• Superannuation may not automatically form part of the estate.
• Assets held as tenants in common may pass under intestacy.
• Children from prior relationships can create competing claims.

Young couples often assume “everything just goes to my spouse.” That is not always correct.

3. Managing superannuation and life insurance

For many young families, superannuation and life insurance represent the largest financial pool available on death. Without binding death benefit nominations, trustees retain discretion as to payment.

A coordinated estate plan ensures:

• Binding nominations are valid and current.
• Proceeds can flow into a testamentary trust if appropriate.
• Tax consequences for children are considered.

This is particularly important where minor children are beneficiaries, as lump sums paid directly may require court-managed investment.

4. Asset protection through testamentary trusts

Young families building businesses or investing in property — particularly in NSW’s dynamic market — face litigation and bankruptcy risks.

A testamentary discretionary trust created in a will can:

• Provide income streaming flexibility.
• Offer tax efficiency for minor children.
• Protect inherited assets from divorce or creditor claims.

This is especially relevant for professionals, business owners, and those in higher-risk occupations.

5. Incapacity planning: not just death

Estate planning is also about incapacity. An accident or illness can leave a parent unable to make decisions.

Documents such as:

• An Enduring Power of Attorney
• An Enduring Guardian appointment

ensure someone trusted can manage financial and medical decisions without the need for tribunal intervention. Without these, families may need to apply to the NSW Civil and Administrative Tribunal, causing delay, cost, and stress at an already difficult time.

6. Reducing family provision risk

Under the Succession Act 2006, eligible persons can bring family provision claims. Clear, considered estate planning — with reasons recorded and structures thoughtfully implemented — reduces the risk of costly litigation that can erode estates intended for children.

For young families, estate planning is not about wealth preservation for the elderly. It is about stability, guardianship, protection, and certainty.

In NSW, where property values are high and family structures increasingly complex, delaying estate planning exposes young families to unnecessary legal and financial risk. A carefully structured will, combined with superannuation nominations and incapacity documents, provides something far more valuable than tax efficiency: peace of mind.

For parents raising children, that certainty is not optional — it is essential.

For more information about estate planning for families, our next article Part two: Why Estate Planning is important for families with businesses will be live 15 April 2026.

If you are interested in preparing or updating your estate documents, or would like to speak with a member of our experienced Estate Planning Team, contact Solari and Stock on 8525 2700, alternatively or click here to request an appointment.

Our Estate Planning Team includes Rebecca Exley, Michael Solari, Nicole Commandeur and Valentina Abouzeid.

Article by Rebecca Exley
Image created in Canva