A mutual will arrangement is, in substance, a contractual or equitable arrangement between will-makers that they will make wills in agreed terms and not later depart from those agreed terms, particularly after one party has died.
It is commonly used where spouses wish to benefit each other during life but ensure that agreed beneficiaries receive the estate after both have died.
It is particularly common in blended-family estate planning, where each spouse has children from earlier relationships and wants to prevent the survivor from later disinheriting the deceased spouse’s children.
The key feature is that a mutual will arrangement is directed to testamentary succession, which is it seeks to control what happens to property after death.
Binding Financial Agreement (BFA)
A BFA, by contrast, is a family law instrument. Its principal function is to regulate how property, financial resources and sometimes spousal maintenance are to be dealt with between parties to a marriage or de facto relationship. It is directed primarily to relationship property rights, especially on separation or breakdown of the relationship.
A BFA is not itself a will and does not operate as a testamentary disposition. It may form part of an estate planning strategy, but it does not replace a properly drafted will, testamentary trust, life interest, superannuation death benefit nomination, or other succession instrument.
So, when might a Mutual Will May be preferable to a BFA?
A solicitor may recommend a mutual will agreement, rather than a BFA, where the main concern is post-death succession, not separation.
A mutual will is appropriate where the parties’ central concern is:
- “If I die first, will my spouse later change their will?”
- “Will my children from a prior relationship ultimately receive part of the estate?”
- “Can we agree that the survivor will benefit during life, but the combined estate will ultimately pass to nominated beneficiaries?”
This is the classic mutual wills scenario. For example, a spouse may wish to leave assets to the surviving spouse but ensure that, after the survivor’s death, those assets pass to the deceased spouse’s children.
A BFA is not designed to solve that problem. It may regulate property rights between the parties, but it will not, of itself, ensure that the survivor’s will remains in agreed terms.
If a reader has any queries, please do not hesitate to call for an obligation-free chat.
Jim Wilson- senior solicitor, Better Business and Estates Lawyers – Gold Coast/Tweed Mobile: 0415 645121 jim@bblawyers.biz
Mutual wills
A mutual will arrangement is, in substance, a contractual or equitable arrangement between will-makers that they will make wills in agreed terms and not later depart from those agreed terms, particularly after one party has died.
It is commonly used where spouses wish to benefit each other during life but ensure that agreed beneficiaries receive the estate after both have died.
It is particularly common in blended-family estate planning, where each spouse has children from earlier relationships and wants to prevent the survivor from later disinheriting the deceased spouse’s children.
The key feature is that a mutual will arrangement is directed to testamentary succession, which is it seeks to control what happens to property after death.
Binding Financial Agreement (BFA)
A BFA, by contrast, is a family law instrument. Its principal function is to regulate how property, financial resources and sometimes spousal maintenance are to be dealt with between parties to a marriage or de facto relationship. It is directed primarily to relationship property rights, especially on separation or breakdown of the relationship.
A BFA is not itself a will and does not operate as a testamentary disposition. It may form part of an estate planning strategy, but it does not replace a properly drafted will, testamentary trust, life interest, superannuation death benefit nomination, or other succession instrument.
So, when might a Mutual Will May be preferable to a BFA?
A solicitor may recommend a mutual will agreement, rather than a BFA, where the main concern is post-death succession, not separation.
A mutual will is appropriate where the parties’ central concern is:
- “If I die first, will my spouse later change their will?”
- “Will my children from a prior relationship ultimately receive part of the estate?”
- “Can we agree that the survivor will benefit during life, but the combined estate will ultimately pass to nominated beneficiaries?”
This is the classic mutual wills scenario. For example, a spouse may wish to leave assets to the surviving spouse but ensure that, after the survivor’s death, those assets pass to the deceased spouse’s children.
A BFA is not designed to solve that problem. It may regulate property rights between the parties, but it will not, of itself, ensure that the survivor’s will remains in agreed terms.
For an obligation free discussion please call
Jim Wilson- senior solicitor
Owner, Better Business Lawyers- Gold Coast/Tweed
M: 0415 645121
E: jim@bblawyers.biz