What are Mutual Wills and are they binding on the parties?
Mutual Wills are Wills made under a contract between two parties, typically parties to a relationship.
Mutual Wills are often used by parties to second or subsequent relationships where one or both has/have children from their prior relationships and where one or both bring their assets and financial resources to the relationship.
Flexibility
Mutual Wills allow for flexibility in the provisions under the Wills to put in place the arrangements for the treatment of property and assets after the death of each of the parties to the contract. Those arrangement might include:
· Protection of their assets for their children;
· The lifetime use of the combined or joint assets by the surviving party to the relationship through life estates of rights of residence in the dwelling;
· The splitting of assets as agreed between the respective children of the relationship upon the last persons death; or
· Ensuring that their children have some immediate provision upon the death of their parent if their parent is the first to pass away where they want the balance of their assets to be used by their surviving partner until their death.
Limitations
The assets affected by the mutual Wills are usually limited to the assets of the parties at the date of the first party’s death. This means that any property acquired by the surviving party after the death of the first party may not be covered by the mutual Wills contract.
Binding Nature of Mutual Wills
The contract must be in writing and signed by the parties before the Wills are signed and witnessed with a copy of the proposed Wills attached to the contract.
It is binding on each of the parties and their estates after death as there are a mutual promises exchanged in the form attached to the written contract:
· To do all within the party’s control to ensure the promises are carried out;
· Not to change their Will without the written consent of the other party, and not to alter the Wills during their lifetime unless there is an agreement to revoke or change the Wills by the parties in writing if their relationship breaks down and there is an agreement to change the Wills.
The Court has recognised that Mutual Wills are binding and can be enforced against the estate of the parties even if they go on to change their Wills without the knowledge of the other party or after the other party’s death.
It is in your best interests to obtain expert advice in relation to your estate planning, particularly in the context of a blended family. The Law Office of Conrad Curry has 25 years’ experience in providing estate planning advice to clients.
Please call to discuss your requirements. (02) 40500330 or book an appointment online.
