An Agreement to Make Mutual Wills is an agreement between 2 parties (usually a husband and wife, but can be a same sex couple or a de facto couple) to make Wills in an agreed form.
Usually, they provide that the parties may not act such that those Wills don’t get given effect to, such as:
- revoking or destroying the Will;
- making a new Will; or
- disposing of assets so that they do not pass to the agreed beneficiaries
without the consent of the other party (or the executors/administrators of their estate if they have died).
Often they are put in place when the parties have had a prior marriage or marriages and there are children of the prior relationship/s and the current relationship.
The benefit of such contracts (or deeds as they often are) is that the parties can take some comfort in providing for the other during their lifetimes (for example by gifting their entire estates to each other in their Wills), but with the overall distribution of their combined estates (on the death of the last of them) passing as agreed in the Wills made pursuant to the document.
Where a party breaches the agreement (such as by changing their Will), that party (or their estate) may be sued by the other party (or their executors/administrators if they have died) for breach of contract.
Whilst mutual Wills can be an effective estate planning tool, they are not for everyone and they can cause unintended complications due to their inflexibility, particularly around subsequent marriages, children and unexpected events following the death of a party.
As with most things, there are also other options or alternatives to consider to get a similar result, including creating life interests in real estate or establishing trusts.
For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email firstname.lastname@example.org.