Mutual Will

Mutual Will
See also

Mutual Will is a type of will that forms a legally binding contract between people, usually but not essentially husband and wife. It involves normally two (but can be more) testators each executing their own will but with each will containing provisions under which each confers on the other reciprocal benefits[1].

The parties to a mutual will agreement bound not to revoke their wills in their lifetime without notifying and getting acceptance from the other party and thereby allowing them to revoke their own will. When one party to the mutual wills agreement dies leaving his or her will unrevoked, relying on the other to observe the terms of the agreement, equity treats that agreement as irrevocable and will not allow the other party to deal with the subject property contrary to the agreement or understanding. As the court in 'Dufour v Pereira' declared, the 'first that dies carries his part into execution. Will the court afterwards permit the other to break the contract? Certainly not". This means that after the death of one party, both wills become irrevocable and cannot be amended[2].

Use of Mutual Will

In general, mutual wills can be made between people who would like to bind each other to an estate plan.

In a variety of circumstances, testators can be especially concerned to ensure that their property passes in the manner they intend. As a result, mutual wills are most commonly used when, for example[3]:

  • persons who remarry and have children from a previous marriage wish their new spouse to enjoy their property during the new spouse's lifetime. They may, however, also be concerned that their children from the previous marriage are the ultimate beneficiaries of such property.
  • a person who is in a relationship that is not recognized in law as constituting a marriage may be particularly concerned that their partner is provided for when they die. Such couples may, therefore, be concerned to ensure that their property devolves to their partner, rather than in the manner dedicated under, for example, intestacy laws.
  • a person wants to give their property directly to their children without giving any interest to the surviving spouse.

Requirements for Mutual Will

According to Caroline Sawyer and Miriam Spero, three things must be established for a court to find Mutual Wills[4]:

  • Agreement between the two or more persons executing the wills who also make provision for each other
  • Agreement that the survivor will be bound
  • Occurrence of the binding event

Moreover, there is no obligation that the agreement has to be in writing, as the mutual will does not have any particular form and do not require any particular formality[5].

Case of Mutual Will

On 25 July 2000, in the office of their solicitor, Mr. and Mrs. Clark executed uncomplicated wills with mirror terms[6]. They gifted their modest estates to each other, in the alternative in equal shares to their two daughters. Unexpectedly, 10 months later, Mr. Clark died. Life takes its course and its vicissitudes corroded the once good relations between Mrs. Clark and her daughters, resulting in them drifting apart and Mrs. Clark forming close relationships with her grandsons and their partners. In the years following her husband's death and up to the time of her own death on 8 February 2016, Mrs. Clark executes some 13 wills, the last of which is dated 12 December 2014. Probate of that will is granted to Mrs. Clark's executors, her two grandsons and one of their partners. Under the probated will, the two grandsons receive the lion's share of the estate.

Mrs. Clark's two daughters, Ann Legg and Lynn Burton, brought a claim against the executors and successfully obtained a declaration that the executors hold the estate on trust, not on the terms of the probated will, but for them in accordance with the terms of the 2000 will.

There was no written agreement, no reference to mutuality in the will (in fact, the will appeared to indicate the contrary) and no evidence from the solicitor who drew the will. The court had nothing more than the oral testimony of the self-interested daughters, and executors, and the fact that the wills mirrored each other and were executed simultaneously.

As to the oral testimony, the court heard one daughter was present at the solicitor's office where their father asked the solicitor “whether everything was ‘set in stone’”,12 referring to the inability of Mr. and Mrs. Clark to change their wills after these wills were signed, and the solicitor replied to the effect that it was. Then, later at home, the daughters expressed concern to their father that this detail was not stated in the will. Their father was dismissive of the concern expressing his preference for simplicity, and their mother, listening to this conversation, shouted from the kitchen, “I bloody won’t change it …”.

In finding that Mr. and Mrs. Clark expressly promised each other not to revoke their 2000 wills, the court determined that Mr. and Mrs. Clark had created mutual wills. This finding was surprising given that the wills expressly stated that the gifts in Mr. and Mrs. Clark's wills were given without imposing any trusts or conditions, and the only “real” evidence available was from the daughters, who were interested beneficiaries. The court accepted the daughters’ evidence as truthful and straightforward. Accordingly, the court found that the executors of 2014 will hold the estate on trust for the daughters.

Footnotes

  1. Finney, M. J. 2012, s.468
  2. Cassidy, J. A. 2000, s.1-3
  3. Cassidy, J. A. 2000, s.1-2
  4. Sawyer, C., Spero, M. 2015
  5. Peiros, K. 2017, s.216
  6. Peiros, K. 2017, s.216-217

References

  • Cassidy, J. A. (2000). Mutual Wills, Federation Press
  • Finney, M. J. (2012). Wills, Probate and Tax Issues, John Wiley & Sons
  • Garb, L., Wood, J. (2010). International Succession, Oxford University Press
  • Peiros, K. (2017). Mutual wills: Alsatian or lioness?, "Taxation in Australia", 52(4)
  • Sawyer, C., Spero, M. (2015). Succession, Wills and Probate, Routledge

Author: Małgorzata Lasota