If you don’t know about the Brady Bunch TV show, Google it. I also recommend you watch the two excellent 1990’s Brady Bunch Movies. Even kids love those. The number of blended families is growing. Couples usually want to or have to combine their resources. A crucial question then arises, namely, how do you provide for your spouse in the event of your death but also provide for your children from your previous relationship?
In the Brady Bunch example what if Carol passes away first? How does she make sure that when Mike passes, that the girls are provided for just as much as the boys? Obviously, the same applies to Mike.
The best way to ensure the Brady Bunch house is shared equally amongst all six kids on the death of both Mike and Carol is for Mike and Carol to draw Mutual Wills.
A Mutual Will can provide that when the last person standing passes away that the assets of the parties are distributed between the children of both families. To be enforceable it should be accompanied by a Mutual Will Agreement. This must be carefully drafted. Such an arrangement, if drafted properly, ensures that all of the children, not just the children from one side, are provided for. In the Brady Bunch example, Mike’s Will (which would be identical to Carol’s) would say that if Carol predeceases him then on his death the Brady Bunch house and all the other assets would be divided equally amongst all six children. (One wonders who would want a house with one bathroom and no toilet but that’s another matter?!).
Both parties in a Mutual Will arrangement covenant that they will not alter their Wills after the death of the other party.
Properly drafted Mutual Wills and a properly drafted Mutual Will Agreement can be enforced by beneficiaries.
A recent Queensland Supreme Court case (Forster) highlighted limitations.
In that case one of the surviving children of the deceased was of the view that the surviving spouse (step-mum) was dissipating the assets. He applied to the Supreme Court of Queensland alleging that the terms of the Mutual Will Agreement were being breached and seeking that the surviving spouse disclose her financial affairs.
There wasn’t much evidence appear that the surviving spouse was acting contrary to the Agreement.
The Supreme Court decided that although the Court will intervene to prevent a fraud in these cases, unless there is fraud then the surviving spouse does not hold the assets on trust. Further, the surviving spouse didn’t have to provide financial statements. In his judgment, the Judge indicated that according to the Mutual Will Agreement in question the surviving spouse was, “entitled to full enjoyment of the Combined Estate during her lifetime, within certain limits, and it is anticipated that she will diminish the property”.
According to that, it could be argued that most of the Estate might be spent by the time the surviving spouse dies, thus frustrating the intention of the Mutual Will.
WHAT TO DO?
At Freeman Family Law we have considerable experience in drafting Mutual Wills and Mutual Will Agreements. Both must be drafted with precision and care to ensure that the surviving spouse does not have the capacity to greatly reduce or dissipate the Estate. The terms of the Agreement are crucial. The Agreement can set out how the assets are to be dealt with. The Wills can also be carefully drafted to ensure that there is oversight.
THE IMPACT OF MUTUAL WILLS AND FORSTER’S CASE ON FAMILY LAW
One way that Mutual Wills can impact on Family Law matters is how it can lead to one of the rare occasions when a beneficiary of a Mutual Will may be required to account for that interest as a financial resource if they have to adjust their property with their spouse.
However, these matters can be referred to in Pre-nuptial Agreements or Agreements made before separation that set out what is to happen after separation.
Again, attention to detail in the drafting of these Agreements is crucial. Freeman Family Law have considerable experience in drafting detailed Financial Agreements either before or after separation.
I am sure Mike and Carol Brady thought all this through when drafting their Wills. I wonder whether they also provided for Alice?!
This article is written by Graeme Freeman, Principal of Freeman Family Law, Accredited Specialist in Family Law.
Freeman Family Law has been assisting clients for over 30 years on matters involving divorce or separation, complex financial and property issues, as well as advice on parenting and wills & estates. Book an appointment with an Accredited Family Law Specialist online or at one of our offices in Yarraville, South Melbourne, Caroline Springs, Essendon or Mornington.Enquire Now
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