Are you part of a blended family?
If you are part of a blended family, take control of your estate planning and protect the financial future of your loved ones by considering a contractual will agreement, ensuring that your assets are distributed fairly and according to your wishes.
Blended families can benefit from contractual will agreements, which ensure fair distribution of assets among children from previous relationships and provide peace of mind for both partners, making it a wise choice for estate planning.
In this blog post, we will explore the basics of contractual will agreements in Western Australia, including what they are, how they work, and some important considerations to keep in mind.
What is a Contractual Will Agreement?
A contractual will agreement is a legal contract between two individuals, usually a married or de facto couple, in which they agree to leave their assets to each other upon death, and then to a specific beneficiary or beneficiaries upon the death of the surviving partner. This type of agreement is typically used when both partners have similar estate planning goals and want to ensure that their wishes are carried out after they are gone.
How Does a Contractual Will Agreement Work?
In Western Australia, a contractual will agreement is a binding legal contract between the two parties. Once the agreement is made, it cannot be changed unilaterally by either party, unless both parties agree to the change. This means that if one partner dies, the surviving partner is legally obligated to abide by the terms of the agreement, and cannot change their will to distribute their assets differently.
One important consideration when creating a contractual will agreement is that it is irrevocable, which means that the surviving partner cannot change their mind and leave their assets to someone else after the first partner dies. This is why it is important to carefully consider the terms of the agreement before entering into it, and to ensure that both parties fully understand their rights and obligations under the agreement.
What are the Benefits of a Contractual Will Agreement?
There are several benefits to creating a contractual will agreement in Western Australia. One of the main benefits is that it provides certainty and security for both parties, as they can be confident that their assets will be distributed according to their wishes after they are gone. This can be especially important for blended families or situations where there may be competing interests among potential beneficiaries.
Another benefit of a contractual will agreement is that it can help to avoid potential legal disputes among family members. Because the agreement is a legally binding contract, it can provide a clear and unambiguous record of the parties’ intentions, which can help to reduce the risk of challenges to the will after the first partner passes away.
What are Some Considerations When Creating a Contractual Will Agreement?
When creating a contractual will agreement in Western Australia, it is important to work with a qualified legal professional who can advise you on the legal and financial implications of the agreement. Some important considerations to keep in mind include:
- Making sure that both parties fully understand the terms of the agreement and their rights and obligations under it.
- Ensuring that the agreement is drafted in a clear and unambiguous manner to avoid potential disputes or legal challenges.
- Considering the tax implications of the agreement, including any potential capital gains tax or stamp duty liabilities.
- Reviewing the agreement regularly to ensure that it continues to reflect the parties’ wishes and any changes in their circumstances.
In conclusion, a contractual will agreement can be a valuable estate planning tool for couples in Western Australia who want to ensure that their assets are distributed according to their wishes after they pass away. However, it is important to carefully consider the legal and financial implications of the agreement before entering into it, and to work with a qualified legal professional to ensure that the agreement is drafted in a clear and unambiguous manner, it may also be worthwhile considering the enforceability of such an agreement. Our lawyers can give you advice in relation to this.
