It is not uncommon that beneficiaries wish to change the distribution of a deceased estate.
Where all beneficiaries agree, a Deed of Family Arrangement may be used to affect the financial consequences of a Will or the Administration Act 1903 (WA) for the beneficiaries.
Commonly, a Deed of Family Arrangement may be used where:
- a beneficiary is disclaiming their right to an inheritance;
- the beneficiaries agree to change how the assets are distributed between them; or
- the beneficiaries agree to include a child or grandchild who did not receive an inheritance under the deceased’s Will.
A Deed of Family Arrangement may be a faster and more cost-effective way to effect the desired change to the distribution of assets.
Consider the example where the deceased, John, has a Will and John’s estate has:
- a residential home valued at $200,000; and
- a bank account which holds $200,000.
Mary wants the cash while David wants the property, but John’s Will provides that John’s estate be distributed as follows:
- Mary is given the residential home; and
- David is given the $200,000 in the bank account.
In this scenario a Deed of Family Arrangement is a faster and more cost-effective way to achieve the desired outcome than David buying the property from Mary as:
- the settlement process to transfer the property to David is much faster and simpler; and
- Mary and David can reduce legal and settlement costs and stamp duty.