Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 12 May 2018.
Mary was divorced several years ago and has two adult children. She meets Barry and after a few years they are married.
Mary owns her own home and Barry has very few assets.
Mary is concerned about her estate planning and researches her options.
After discussing the matter with Barry, they decide to make “mutual wills”. The effect of the wills are that they leave the whole of their assets to each other and then when the surviving spouse ultimately dies, the whole of their estate is left to Mary’s two children.
According to Mary’s research, they are able to enter into a contract not to change their wills. Mary is of the view that this will ensure that if she dies first, Barry will be obligated to leave his estate to her children.
Mary and Barry sign mutual wills and enter into a contract not to change their wills.
Unfortunately, Mary dies a few years later.
Under Mary’s will, Barry receives the whole of her estate. He sells her home and sells all of Mary’s remaining assets.
Barry uses part of the proceeds of Mary’s estate to fund an extensive overseas vacation. Barry does not return to Australia for two years and the cost severely depletes the inheritance.
Barry then meets Julie and after four years, the relationship breaks-down, resulting in Family Law proceedings whereby Julie receives a substantial settlement.
When Barry dies, it is revealed that he had honoured the contract not to change his will and Mary’s children each receive half of his estate.
Unfortunately, it is also revealed that there are virtually no assets in Barry’s estate.
Proper estate planning could have protected Mary’s children.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
