When it comes to estate planning, deciding how to structure your will is one of the most important choices you can make. For couples, especially, two common types of wills that often come up are mirror wills and mutual wills. Both can be effective ways to ensure your wishes are carried out after you pass, but they work in very different ways. Let’s break down what each type involves, the benefits and drawbacks of each, and when they might be appropriate for you.
What are mirror wills?
Mirror wills are very common among couples and are essentially two wills that are almost identical to each other. In most cases, spouses or partners will name each other as their primary beneficiary, meaning the surviving partner inherits everything. They’ll often name the same alternate beneficiaries (like children) if both pass away.
The key feature of mirror wills is that they can be changed or revoked at any time by either partner, as long as they have the mental capacity to do so. For example, if circumstances change—such as a remarriage, a change in financial situation, or even just a change of heart—you’re free to update your will without needing your partner’s permission.
The benefits of mirror wills:
- Flexibility: You can update your will anytime if your circumstances or wishes change.
- Simple and straightforward: They’re easy to create and reflect shared intentions, making them popular for couples who are in agreement on their estate plans.
The drawbacks of mirror wills:
- No guarantees after one partner dies: Since either partner can change their will at any time, there’s no assurance that the survivor will stick to the original plan once the first partner passes away. This could lead to changes that weren’t agreed upon, such as leaving assets to someone else.
What are mutual wills?
Mutual wills are a bit more complex because they involve a legal agreement between the two partners. Like mirror wills, mutual wills often have identical terms, but with one major difference: they create a binding contract. Once one spouse or partner passes away, the surviving partner is legally obligated to follow the terms of the mutual will and cannot change it.
Mutual wills are essentially a way of ensuring that neither partner can change their mind after the other has passed away. If either party wishes to change their will while both are still alive, they must notify the other person. However, once one partner dies, the survivor cannot alter their will, even if circumstances change.
The benefits of mutual wills:
- Security and certainty: Mutual wills offer peace of mind that the surviving partner cannot change the will after the first dies, protecting the original wishes.
- Preserves family wishes: This can be particularly useful if you want to ensure that certain beneficiaries (like children from a previous marriage) are protected and will inherit according to your original plan.
The drawbacks of mutual wills:
- Lack of flexibility: Life circumstances can change—people remarry, have more children, or develop new financial situations. Once one partner dies, the survivor is locked into the original plan, which could cause problems if their needs or desires change.
- Potential for unintended consequences: The surviving partner can still use and spend assets as they see fit but must ultimately preserve what’s left for the agreed beneficiaries. This can create tension if the surviving partner needs to spend a significant portion of the estate, leading to estate disputes later on.
When are mirror wills or mutual wills appropriate?
Choosing between mirror wills and mutual wills depends largely on your unique family situation and long-term goals.
- Mirror wills may be more appropriate if you and your partner trust that the survivor will stick to the original plan but still want the flexibility to adapt your will if things change. These are ideal for couples in their first marriages with a shared vision for their estate but who are open to life’s unpredictability.
- Mutual wills, on the other hand, are typically suited for people who want to guarantee that the estate plan remains unchanged after one partner’s death. This can be particularly important in blended families, where you want to ensure that children from previous relationships are taken care of. They can also provide peace of mind when you feel the need for more control over what happens to your estate in the long term.
How to make the right estate plan for your family
It’s essential to think carefully about what’s right for your situation. Mirror wills offer flexibility and ease, but mutual wills provide certainty and enforceability. However, with mutual wills, you’re committing to a plan that may not fit future circumstances, so it’s crucial to understand the potential limitations.
At Copeland Estates Legal, we’re here to guide you through every step of the estate planning process, helping you make the best choices for your family’s future. Whether you’re considering mirror wills or mutual wills, we can help you ensure that your wishes are honoured and that your loved ones are provided for.
If you’re unsure about what kind of will is right for you, contact us today for a chat about your estate planning needs. We’ll help you find the solution that gives you the peace of mind you deserve.
Send us an email at [email protected], give us a call on 1300 034 487 or book in a free 10 minute chat here.
We’ll look after you.
