Your will sets out how you wish to have your assets distributed following your death. There are a number of different types of wills so it is important to choose which type best suits your own personal circumstances.
These wills are straight forward, clear and without complications. In a simple will, the willmaker appoints an executor and leaves their whole estate to one or more beneficiaries for example, their spouse. If that beneficiary predeceases them, then the Estate can be given to other beneficiaries, such as their children.
Simple wills are best suited for people without complicated family dynamics or ‘at risk’ beneficiaries.
Mutual wills are individual wills made by two people, generally spouses, on terms which reflect each other. At the same time as the wills are made, a separate contract between the willmakers is signed in which they agree that they will not amend the terms of their respective wills without the consent of the other. That contract will remain binding on the survivor, even after the death of the other spouse.
Mutual wills are often used by couples who seek to ensure that their estate passes to their children even if the surviving spouse remarries.
If the surviving willmaker does make a new will in contravention of the mutual will contract, the beneficiaries under the previous will can initiate court proceedings to enforce the contract.
There are downsides to mutual wills in that they can force surviving parties and their families into litigation as time passes and circumstances change after the death of the first willmaker. It is essential therefore that advice is taken as to the risks and benefits of mutual wills in each case, before a decision is made to enter into them.
Testamentary Trust Will
These wills establish a separate trust or trusts which only come into existence upon the death of the willmaker. For this reason they are called Testamentary Trusts. The estate’s assets fall into the Testamentary Trust rather than going to beneficiaries in their own right. The trustee of the Testamentary Trust usually has full discretion as to when or whether a beneficiary receives a distribution from the trust and how much they receive.
This type of will offers can be useful for willmakers who wish to provide a benefit to family members that face financial difficulties or are under some other form of disability or personal issue affecting their ability to properly manage their affairs. Testamentary Trusts also offer some tax benefits for beneficiaries in certain circumstances.
Statutory wills are actually orders made by the court stipulating how a person’s estate is to be distributed in circumstances where that person is not legally capable of creating their own will. This may be because of illness, physical or mental disabilities that substantially, adversely impact on their capacity to make a new will or handle their own affairs.
Statutory wills can be useful where an impaired person owns, through whatever means, high value assets or stand to inherit such assets in the future and a will is needed to deal with those assets on their death.
Link to other will and estate planning articles.
If you have any questions about the various types of wills or would like to have any type of will prepared for you, please feel free to contact us.