Mutual Will

AAA

DEFINITION of 'Mutual Will'

A type of will, usually executed by a married or seriously committed couple, that is mutually binding. After one party dies, the remaining party is bound by the terms of the mutual will. The purpose is often to make sure property passes to one's children rather than to a new spouse. Because of state differences in contract law, a mutual will should be established with the help of a legal professional.

Though the terms sound similar, a mutual will should not be confused with a joint will.

INVESTOPEDIA EXPLAINS 'Mutual Will'

For example, John and Alice create mutual wills. John dies and his property passes to Alice. Alice takes a new husband, Jay. When Alice dies, because of an agreement made in the mutual will, her property will not pass to Jay. Instead, it will go to John and Alice's children.

RELATED TERMS
  1. Duress

    The act of using force, false imprisonment, coercion, threats ...
  2. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  3. Heir

    HeirA person who inherits some or all of the estate of another ...
  4. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  5. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  6. Will

    A legally enforceable declaration of how a person wishes his ...
RELATED FAQS
  1. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  2. What is the difference between a revocable trust and a living trust?

    A revocable trust and living trust are separate terms that describe the same thing: a trust in which the terms can be changed ... Read Full Answer >>
  3. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  4. How is maintenance of standard of living for survivors accomplished in estate planning?

    Estate planning is an integral component of comprehensive financial planning, as it allows individuals and couples to maintain ... Read Full Answer >>
  5. What is the difference between an intervivos trust and a testamentary trust?

    Estate planning offers tools to establish and maintain effective control over cash, investment and real estate assets during ... Read Full Answer >>
  6. What are the differences between a Chartered Financial Analyst (CFA) and a Certified ...

    The differences between a Chartered Financial Analyst (CFA) and a Certified Financial Planner (CFP) are many, but comes down ... Read Full Answer >>
Related Articles
  1. Retirement

    How To Choose The Right Executor For Your Estate

    Making a careful choice now can save your heirs from a lot of problems later.
  2. Retirement

    Why You Should Draft A Will

    Don't trust the courts to follow your wishes - plan the distribution of your own assets.
  3. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  4. Professionals

    How Advisors Can Help New Doctors Conquer Debt

    Doctors have high potential for building long-lasting wealth, but they need advice on the best way to pay off student loan debt first.
  5. Professionals

    Advisors: Get Those Referrals! (Here's How)

    If you're not talking to your clients about referring you to friends, you should be.
  6. Taxes

    An in Depth Look at How Inheritances Are Taxed

    The tax implications of an inheritance can be complex. Here's what beneficiaries need to know.
  7. Professionals

    How Advisors Can Assist Clients with Inheritances

    Leaving an inheritance can be complicated and even a burden on the recipient. Here's how advisors can help.
  8. Professionals

    How Financial Advisors Can Woo Wealthy Clients

    To woo wealthy clients, offer the resources they need and design a strategic website and marketing plan to bring those desired clients into your firm.
  9. Professionals

    Do Big Inheritances Do More Harm Than Good?

    Most wealthy parents plan to pass on their wealth, but few have had discussions with their heirs. Financial advisors should broach the issue with clients.
  10. Personal Finance

    Top Tips for Helping Clients Sustain Wealth

    High-net-worth individuals face a number of potential challenges when passing wealth down, but it is possible to build generational wealth.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!