Should You Enter Into A Mutual Will?
Often couples wish to create Wills that mirror each other in their intentions. However, because it is public policy that an individual can change their will at any time it is possible that the survivor may amend their Will after the other’s death. One way to avoid this problem is to enter into a contract to make mutual Wills.
A mutual Will occurs when two parties make a contractual promise to the other that they will leave their estate in a certain way. Importantly, this agreement specifies that neither party can change or revoke their Will following the death of the other party.
Mutual Wills most frequently arise in cases where one or both spouse has children from an earlier relationship. In such cases, the parties may wish to ensure their Estate is distributed as they intended and that their children will not be denied access to their Estate after their death.
Mutual wills provide this reassurance in that they allow the surviving partner reasonably unrestrained access to the assets in the Estate, but with an obligation to preserve the assets and pass them to the children as intended by the couple when creating their Wills.
While there are benefits to creating Mutual Wills, due to the nature of the contract there are a number of problems that can occur:
In preparing a Will, it is reasonable for a person to want to ensure their beneficiaries receive the assets they intended to leave for them. While Mutual Wills can help protect the interests of both parties, they can also limit investment possibilities and flexibility in utilising assets for the surviving party.
Whether entering into this sort of contract is beneficial will depend on individual circumstances and should be considered based on the wishes of both parties. If you are considering using Mutual Wills as part of your Estate Planning, please contact you relevant ESV Engagement Partner on 9283 1666.
Article by Edwina Ring