Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 26 November 2016.
Robert and Jennifer each have a child to a previous relationship.
They are married in 2000 and consult a solicitor regarding the drafting of their wills.
They are advised that one of the options available is to make “mutual wills”.
This is an arrangement whereby Robert and Jennifer execute a deed to the effect that they each agree to make a will that ultimately leaves their estates to their respective children equally.
For example, if Robert dies before Jennifer, his will leaves the whole of his estate to Jennifer and then when Jennifer dies, her will leaves her estate to Robert’s son, Matthew and her daughter, Leanne equally.
At the time that they make their Wills, Matthew and Leanne are three years old.
Robert unexpectedly passes away in 2013. Matthew, who resides with his mother, is just 16 years of age at the time.
Matthew obtains a copy of his father’s will and becomes aware that Jennifer receives the whole of his father’s estate. He also receives a copy of Jennifer’s will, naming him as a beneficiary. Matthew is unaware of the existence of the deed to make mutual wills.
In 2016, Jennifer enters into a relationship with Romeo. They move into Romeo’s home with Leanne. They enjoy a lavish lifestyle and Jennifer squanders the inheritance that she received from Robert. She also makes a new will, leaving the whole of her now small estate to Jennifer.
When Jennifer ultimately passes away, Matthew is still unaware that the deed to make mutual wills exists and is unaware of his rights.
Even if Matthew was aware of the deed, and although Jennifer is in breach of the provisions of the deed, there are no assets left for Matthew to recover.
Matthew ultimately misses out on any provision from his father’s estate.
Mutual wills were once a popular way to deal with estate planning for blended families but due to the difficulties that can arise, alternatives such as establishing “life interests” may be the preferred option.
You can contact Manny at manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
