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Over the years, family situations have become more complex. People enter 2nd, and sometimes 3rd marriages. They may avoid the act of remarrying, and choose to live together in common law. In many cases these spouses have children from their previous relationships. These blended families can create challenges for the lawyer that is involved in the estate planning process. These spouses come to their lawyer with the following goal:
We want to ensure that the surviving spouse is looked after financially on the death of the first spouse. After both my spouse and I are deceased, we want to ensure the remaining estate is equally divided among our children from both of our previous relationships. In other words, both step and biological children should be treated the same.
In most estate plans, the husband and wife’s wills are created at the same time. Each spouse leaves a portion (or all) of the assets to their surviving spouse. When the last spouse dies, the estate is divided according to their will. It is typical for last will to divide the estate among the surviving children.
While the spouse may be temped to leave assets to their children (in the first will), they need to make sure that their spouse is adequately provided for. Leaving a spouse out of a will or providing a minimal amount may create a problem. Under the Dependant Relief Act of Alberta, a surviving spouse can apply to the Court for a greater share of the estate if they feel they have not received proper maintenance and support in the deceased spouse’s Will. In cases where there are not a lot of assets, all assets may have to be left to the surviving spouse.
The risk that blended families face is that the surviving spouse can re-write their will, and remove the step children as beneficiaries. In that case the biological children of the surviving spouse could receive the assets of both their parent and step parent.
A Mutual Will may be useful in a blended family situation, to ensure the goal that both spouses will continue to treat both their children and the step children in the same way.
What makes a Mutual Will different from a traditional Will is that upon the death (or mental incapacity) of the first spouse, the surviving spouse cannot change the named beneficiaries in their Will or what percentage of the estate each beneficiary will receive.
At the time the spouses sign a Mutual Will, they also sign a contract that confirms they are bound not to make changes to the Wills, unless such changes are agreed to by both of them. The contract provides an additional remedy to the beneficiaries written out of the Will allowing them to enforce the intent shown in the Mutual Will.
The contract also applies in the situation where the surviving spouse remarries. In Alberta, marriage invalidates an existing Will, including a Joint Will. The contract is not revoked and continues to bind the surviving spouse.
The Courts have acknowledged the validity of Mutual Wills and the intention of the spouses to benefit both sets of children.
While Mutual wills are not for every blended family situation, they are important to discuss with your lawyer in addressing your specific estate planning goals.