Mutual wills arise where two or more individuals (usually a couple) draft wills on the basis of an agreement that neither will change their will without the agreement of the other. This agreement is ordinarily recorded in the wills themselves.
What this means is that on the death of the first individual, the estate is held according to the terms of the mutual will agreement and a floating trust arises over the assets such that the survivor is not free to dispose of them as they wish.
While mutual wills may appear an attractive solution, particularly in instances of second relationships and blended families, there are a number of complications that can arise.
Assets may be spent or substantially gifted during the survivor's lifetime (potentially defeating the purpose of the floating trust).
Fixed arrangements may become unworkable if they do not take into account future life events such as remarriage or further children.
Agreements which are not recorded in the wills
A mutual will agreement can sometimes arise even though there is no such express agreement set out in the wills.
In Charles and others v Fraser [2010] EWHC Civ 2154 (Ch) cohabiting sisters made identical wills and agreed to leave their estates (on the second death) to a list of agreed beneficiaries.
The Court noted that there was an inherent improbability that a testator would be prepared to give up the possibility of changing their will in the future and stated that strong evidence would be required to confirm that a mutual will arrangement existed. It was noted that the sisters:
- had frequently talked about the wills, referring to them as "the will" rather than their separate wills.
- had said that the wills "must never be touched or altered in any way".
- believed "that the will could not be altered in any way, and they signed in the knowledge that this was the effect".
- had been understood to have intended the wills to be binding even though they had not expressly said as such (according to their nieces, two of the witnesses).
In addition, the surviving sister had frequently talked about the will and said that she would not change it because of her agreement with her sister.
In the event the surviving sister did make two subsequent wills. The first was to change “her half” of a list of beneficiaries, which at the time she had considered not to be in breach of her agreement with her sister as she did not touch her sister’s “half” of the list.
The second was made at a time when the surviving sister had dementia and had forgotten some key events (including that she and her sister had shared a house for many years). The Court held that there had been a mutual will agreement in place.
In the recent case of Ian Paul McLean and Ors v Brett McLean, H10CL283 (2022 - unreported) the Court did not consider that the threshold to establish mutual wills had been met. An agreement for wills to be mutual wills depends on a binding agreement in place.
The estoppel type arrangements referred to in this matter (i.e., relying on promises alone) was not enough to form such an agreement.
The Court instead concluded that whilst there may have been a moral obligation on the surviving spouse to not change their will; this was not legally binding or enforceable.
Agreements which only catch part of the estate
What assets are caught depends entirely on the agreement reached.
In Lindner v Green [1951] Ch. 148 husband and wife executed wills in similar terms.
The husband’s will contained a recital that “whereas my dear wife has agreed with me that if she shall survive me and have the use of all my property during her lifetime without any liability to account she will provide in her will for the carrying out of my wishes as expressed in this my will ... and in consideration of such promise by me she has agreed to leave me all her property on my undertaking to provide for the carrying out of the terms of her will ... of even date ".
The wife died first, with the husband subsequently remarrying and executing a further will to benefit his second wife.
The Court ruled that there was a mutual will agreement which extended over the share of the husband’s estate which he inherited from his first wife.
The portion inherited from the first wife was therefore held on trust on the terms of her will, but the husband was permitted to leave his remaining estate on the terms of his later will i.e., to his second wife.
Avoiding these pitfalls
It is important to consider whether a mutual will is really necessary at all. It may be possible to achieve the same or a similar outcome by way of placing assets into a lifetime trust, with a power to appoint to a selection of beneficiaries.
Binding or mutual wills are inflexible instruments and incapable of adapting to meet changing circumstances.
Drafters must also be careful to not inadvertently create mutual wills and the scope of any agreement that is intended should be carefully drafted.
The more documentation that exists the better, including recording any agreement that may exist, detailed information about why an agreement does not exist, any advice that has been given, reasons as to why a will has been changed and the instructions given.
The more documentation that does exist and the clearer the drafting of the will, the harder it is for a claim to be brought (or the position to be challenged).
Conclusion
Overall, mutual will agreements should be approached with caution as they offer very little flexibility, particularly given the often unexpected nature of life.
The same outcome is usually better achieved through a trust mechanism or other family arrangement.