What is a Deed of Family Arrangement?

A Deed of Family Arrangement is a legally binding document that allows beneficiaries and interested parties to alter the distribution of a deceased person’s estate. In Western Australia, such a deed can modify the terms of a will or adjust the distribution of assets under the laws of intestacy (when someone dies without a will).

Key Aspects of a Deed of Family Arrangement in Western Australia:

1. Purpose:

This deed is used to resolve disputes, clarify ambiguities in a will, or adjust asset distribution to better suit the beneficiaries’ circumstances.

2. When It’s Needed

• Disputes Among Beneficiaries: When there are disagreements over asset distribution.
• Unclear or Outdated Wills: If the will’s terms are ambiguous or don’t reflect current family dynamics.
• Intestacy Situations: When a person dies without a will, and the default legal distribution doesn’t align with the family’s wishes.

3. Legal Requirements

• Agreement: All beneficiaries and interested parties must agree to the proposed changes.
• Signatures: The deed must be signed by all parties involved, including the legal personal representative (executor or administrator) of the estate.
• Witnessing: Signatures should be witnessed by an independent adult to ensure the document’s validity.

4. Limitations

A Deed of Family Arrangement cannot be used to reduce the entitlement of someone under 18 years of age or a person without mental capacity.

5. Tax and Duty Considerations

It’s essential to be aware of potential capital gains tax (CGT) and stamp duty implications when entering into such a deed. These factors can affect the distribution of assets and the overall value of the estate.

Given the complexities involved, it’s advisable to consult with a legal professional experienced in estate planning and probate matters in Western Australia to ensure the deed is properly drafted and executed. If you’re considering entering into a deed of family arrangement, feel free to contact the estate planning team at Lotus Legal for a discussion about your needs.