Expert Will Drafting for WA Business Owners
Should You Contract to Make a Will? Exploring the Pros and Cons of Mutual Wills
When it comes to estate planning, creating a clear and enforceable Will is critical to protecting your legacy. An approach that has gained attention is the use of Mutual Wills, which are governed by a contractual agreement between two parties. Although Mutual Wills can offer certainty, they also present certain limitations.
What Are Mutual Wills?
A Mutual Will is a legally binding agreement between two parties, typically spouses, where they agree by contract to create Wills in a specific form and will not alter their Will without the consent of each other, including after the death of the other person.
In the event that a Mutual Will is established with another individual and subsequently, following their passing, the agreement is breached by creating a new Will, the new Will remains technically valid. Nonetheless, the executor of the new Will is obligated to hold the assets in trust for the beneficiaries designated in the original Mutual Will. This legal enforcement ensures that the terms of the Mutual Will are respected.
Advantages of Mutual Wills
Mutual Wills offer a sense of security and predictability for both the Will-makers and their beneficiaries.
Certainty: Both parties know that the agreed-upon distribution of assets cannot be altered unilaterally.
Protection for Beneficiaries: Beneficiaries can be assured that their inheritance will not change due to unforeseen circumstances or decisions by the surviving party.
Disadvantages of Mutual Wills
Despite their advantages, Mutual Wills also have several potential downsides that require careful consideration.
Asset Dissipation: A surviving party may deplete the estate’s assets after the death of the first party without technically breaching the agreement.
Inflexibility: The surviving party cannot revise the Will after the other party's death, even if circumstances change. For example:
A beneficiary may develop a drug addiction or financial irresponsibility.
A beneficiary might become ineligible for government benefits due to an inheritance.
Family Provision Claims: A Mutual Will does not shield the estate from claims under family provision laws. The High Court ruling in Barns v Barns (2003) confirmed that assets governed by a Mutual Will remain part of the estate and are therefore subject to family provision claims.
Custom Solutions for Business Owners and Estates
Mutual Wills can be an effective estate planning tool when carefully tailored to specific circumstances. For individuals associated with businesses, it is often wise to limit the contract to certain assets or use complementary strategies, such as trusts or staggered distributions, to enhance flexibility and protection.
At Granich Partners, we understand the unique complexities faced by business owners and high-net-worth individuals in Western Australia. Our team can help you:
Draft Wills That Reflect Your Intentions: We ensure that your wishes are legally enforceable while considering potential future challenges.
Incorporate Business Succession Planning: For those with business interests, we align your Will with your business succession plan to avoid conflicts and maintain continuity.
Navigate Family Provision Risks: We offer strategies to minimize the risk of disputes and claims against your estate.
Create Tailored Trust Structures: Trusts can be an excellent way to provide flexibility and protection for beneficiaries while honoring your wishes.
Why Granich Partners for Will drafting?
With decades of experience, Granich Partners is Western Australia’s trusted legal advisor for Wills, estate planning, and business succession. We specialise in serving clients with estates tied to businesses, ensuring that every aspect of their estate plan is comprehensive and robust.
Secure Your Legacy Today
Whether you are a business owner, property investor, or individual with significant assets, having a properly drafted Will is essential. Don’t leave your estate to chance, work with Western Australia’s most experienced team in Wills and estate planning.
Contact Granich Partners today and take the first step in protecting your legacy.