Since joining Quinn & Scattini Lawyers, I have come to understand the importance of accurate advice and detailed consideration and advice when it comes to estate planning for blended families. My experience in previous legal roles was that all too often estate planning for couples was simplified to the mere preparation of a will. While this is appropriate in many situations, it may not actually guarantee that your wishes are fulfilled!
One area where it is particularly important to receive professional estate planning advice is for couples in a “blended family” situation. For estate planning purposes, the term “blended family” refers to a family unit where the spouses each have children from previous relationships.
One method of dealing with the estate planning needs of a blended family is by using a Mutual Wills Agreement.
So what is a Mutual Wills Agreement and why go to the expense of having one prepared?
The Mutual Wills Agreement is an agreement between two persons to:
- Leave their estates in a particular way; and
- Not make any changes to their will without the consent of the other party.
It is particularly useful for the blended family. For example, if you and your spouse each have children from previous relationships, you may specify that you each want to leave your estate to one another in the first instance, but on the condition that all of the children share equally in the entire estate once you have both passed away.
The Mutual Wills Agreement binds the surviving spouse from changing their will after the first spouse passes away, ensuring that their children are appropriately provided for. It may be prudent to enter into a Mutual Wills Agreement because, under Queensland law, every person remains free to change their will at any time (provided that they still have the mental capacity to do so). Effectively, when spouses in blended families have not entered into a Mutual Wills Agreement, there is nothing to stop the surviving spouse from subsequently changing their will and cutting out their step-children.
Oftentimes, spouses preparing new wills want to leave the estate to one another in the first instance, and then to their children if the other spouse has passed away. The issue to consider in the blended family situation is that there could be significant disputes following the death of one of the spouses, because the children of the deceased spouse may be (justifiably) upset that their step-parent is receiving the whole of their parent’s estate and they have not received anything. In this instance, the children may end up challenging the effect of the will on the basis of a Family Provision Application, resulting in wasteful litigation that diminishes your estate.
The Mutual Wills Agreement may be a cost-effective means of ensuring that your estate goes where you want it to go, but it is certainly not the only means of doing so. Other alternatives that you may wish to consider include:
- Giving your spouse a right to reside for their lifetime only;
- A testamentary discretionary trust;
- Inter vivos (which is fancy lawyer jargon for “while living”) transfers of your property;
- Making Binding Death Benefit Nominations with your superannuation; or
- Specifying the beneficiaries for your life insurance policies.
Estate planning is a very important matter, and should not be considered lightly. Although it may seem like an unnecessary expense to use a solicitor for your estate planning, this must be weighed against the fact that your will is one of the most important documents you will ever sign (if not the most important). With professional advice and preparation of your documents by Quinn & Scattini Lawyers, you can be comfortable in the knowledge that your testamentary intentions are more likely to be fulfilled and your estate is less likely to be exposed to costly litigation, and will be distributed as you intended.