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- Unclear or Outdated Wills: If the will’s terms are ambiguous or don’t reflect current family dynamics.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.