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Pittwater Life October 2017 Issue

Bill & Alfred. Election Deep Dive. Secret Men's Business. Eyes in the Sky.

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have an allowance to be<br />

maintained.<br />

On the death of her<br />

husband the wife in the Will<br />

revoked the original Will and<br />

made a new Will with various<br />

legacies and arrangements,<br />

the effect of which was to cut<br />

out the residuary gift to the<br />

grandchildren.<br />

The grandchildren sued<br />

their mother, who under the<br />

new Will was the beneficiary.<br />

They claimed that their<br />

mother and stepfather<br />

(Pereira) had “converted,<br />

applied and disposed of<br />

the personal estate of their<br />

grandfather” – in other words,<br />

they had been cheated out of<br />

their inheritance.<br />

The issue in the case was<br />

the right of the grandmother<br />

to leave her property contrary<br />

to the mutual Will and give to<br />

her daughter and not to her<br />

grandchildren.<br />

It was found that a mutual<br />

Will was a mutual agreement<br />

expressed in a contract.<br />

The consideration for the<br />

agreement was the reciprocity<br />

of provisions each made in<br />

consideration of the other. A<br />

binding agreement had been<br />

established.<br />

It was therefore determined<br />

that all the bequests in the<br />

original mutual Will between<br />

husband and wife, where the<br />

residue was to be divided<br />

into two equal parts for the<br />

grandchildren, belonged to<br />

the granddaughters as agreed<br />

in the mutual Wills.<br />

Mutual wills arise where<br />

two or more people make<br />

an agreement as to the<br />

disposal of their property<br />

through Wills, and each has,<br />

in accordance with their<br />

agreement, executed a Will.<br />

The doctrine is based on the<br />

mutuality of the obligation<br />

of the two testators each to<br />

make provision for the other.<br />

What makes mutual Wills is<br />

a specific agreement that the<br />

provisions for the distribution<br />

of property set out in the Wills<br />

are to be binding and are<br />

frequently expressed that they<br />

should not be revoked.<br />

A common arrangement<br />

where mutual Wills are used<br />

is where a husband and wife<br />

marry and each has children<br />

from an earlier marriage.<br />

They may agree that whoever<br />

The Local Voice Since 1991<br />

survives the other is to inherit<br />

the estate of the other, but<br />

on the death of the surviving<br />

spouse, his or her entire<br />

estate is to be divided, for<br />

example, equally amongst<br />

all of the children of both of<br />

them.<br />

During the life of the<br />

husband and wife if one of<br />

them changes or makes a new<br />

Will without obtaining the<br />

consent of their partner, this<br />

is a breach of the agreement.<br />

It may be that one partner<br />

alters the Will and leaves the<br />

whole of his/her estate to<br />

his/her children. The partner<br />

who learns of the change<br />

can make a new Will because<br />

the breach of the agreement<br />

discharges he/she from<br />

having to comply further with<br />

the agreement.<br />

There are limitations in<br />

a mutual Will arrangement<br />

where, for example, one<br />

spouse has died and the<br />

estate has been inherited<br />

by the survivor. While the<br />

survivor will not be able to<br />

make a new Will which could<br />

operate to give away the<br />

estate other than according<br />

to the scheme of the agreed<br />

mutual Will. Unless the wills<br />

are precise and clear with<br />

matters particularized, for<br />

example, listed as to:<br />

n The trusts on which the<br />

property is to be held;<br />

n The property to be<br />

included;<br />

n What happens during the<br />

lifetime of the survivor; and<br />

n The nomination of the<br />

trustees and their powers.<br />

It may be difficult to<br />

prevent the survivor from<br />

doing what is known as<br />

‘white anting’ the agreement<br />

by giving away assets during<br />

his/her lifetime.<br />

There are many other<br />

matters to be considered in<br />

relation to mutual Wills, which<br />

should be the subject of<br />

advice and elaborated on in<br />

conference.<br />

Comment supplied by<br />

Jennifer Harris, of Jennifer<br />

Harris & Associates, Solicitors,<br />

4/57 Avalon Parade,<br />

Avalon Beach.<br />

T: 9973 2011. F: 9918 3290.<br />

E: jenniferha@pacific.net.au<br />

W: www.jenniferharris.com.au<br />

OCTOBER <strong>2017</strong> 55<br />

Business <strong>Life</strong>

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