Many of today’s Australians embark on second and marriages early in life. Quite often, each partner to the new the marriage has children from a prior marriage, and the two families merge into one new blended family.
Blended families can create a number of estate planning needs and concerns, such as what the children of each partner will receive from the joint marital assets and what happens when one of the partners dies and then remarries.
A Mutual Will Agreement (MWA) is a useful estate planning tool in these situations. In a MWA, both partners create Wills that include terms that are known to the other partner. A MWA is a legally binding document that is designed to reduce the chances of surviving partners changing their minds with respect to their Will.
Both partners also enter into a separate agreement that neither of them can make a new Will without the consent of the other, even in cases where one of them predeceases the other. The effect of entering into such an agreement is that it becomes a contract to which the Will beneficiaries have a right of enforcement.
Beneficiaries need to be informed of the existence of a MWA since they have the right to enforce it. If a surviving partner has unreasonably exhausted all the assets of the deceased, beneficiaries may sue for breach of contract.