Who will your will protect? (and will it accurately reflect your “will” …)
In today’s society second/third marriages/relationships are the “norm” and often one or both of the parties has a child or children from that previous relationship. It is common in these circumstances that my clients want to do 1 of 2 things:
1). Protect their kids and ensure that they receive a benefit from the estate without it all going to the new spouse; or
2). Minimize a bequest to one or more children or leave them nothing at all.
There are important considerations to be made in these scenarios.
1). Protecting your children.
When doing a will with your new spouse it is important to:
● Look at how your assets are owned (joint tenants or tenants in common);
● Consider your assets that you own with your new spouse and how they were acquired (that is with whose funds – yours, your spouses or a combination);
● Consider not just the needs of your previous children but also your spouse and any children that you have or may have together.
This information is important in preparing your will and receiving proper advice on what needs to be done to convey your will.
In many situations (especially where both parties have kids from a previous relationship), my clients have reached an agreement as to how their assets are to be divided between the surviving spouse and any children regardless of which of the spouses passes away first. In these situations it is important for the parties to enter into a mutual wills agreement. A mutual wills agreement confirms the terms of the wills that the parties have agreed upon and states that each party will do whatever is necessary to ensure that their will stays valid. The legal representative of the estate of a deceased spouse to a mutual wills agreement has the right to take action against the surviving spouse (or their estate) for failure to comply with the obligations of the mutual wills agreement.
Because of the obligations and rights they impose, mutual wills agreements are not just for people in subsequent relationships. We have done mutual wills agreements for clients who have been happily married for 30+ years and have built up assets over that time. In these cases the parties are usually concerned about one of them passing away and the surviving spouse re-partnering and their children missing out on their hard earned assets and those assets going the surviving spouse’s new partner.
2). Minimizing a bequest to children or leaving them nothing at all.
This request is most common where the spouse with the children from a previous relationship feels that their previous spouse got “everything” or more than they “deserved”. Whilst the court (if a claim is made against your estate) may take this into consideration they will also consider your gift, or lack thereof, to your child/children. Under the Succession Act children (or their legal representative) are eligible persons and entitled to make a claim against your estate. A court can find that your moral obligation to provide for your children is not diminished by virtue of the Family Law settlement you reached with your prior spouse.
It is essential when preparing your will that the person preparing your will obtains a full statement of your assets and family situation. Without these, you cannot be given complete advice about what can be done to properly implement your wishes. It may be necessary for additional supporting documents to be prepared and issued. The Succession Act gives the court power to order that the costs of a person making a claim against your estate are to be paid from your estate. These costs can quickly increase and diminish the value of your estate. If you have made reasonable bequests in your will and can show you have taken into account proper considerations, then the court is more likely to reject a claim by any other person for provision from your estate.
Don’t allow major life events to happen without updating your will. Make your “will” your will.