Mutual Wills are a different way for couples to ensure assets are dealt with by each other after they die. The Wills form an agreement or contract between the couple and seek to bind each other when one of them dies, so the survivor cannot change their Will. Whilst a mutual Will “contract” might seem like a good option for couples with children from previous marriages, there are many problems that can arise when aggrieved beneficiaries (usually the adult children) wish to enforce their legal rights under a mutual Will. This week on Radio 4CRB, Attwood Marshall Lawyers Estate Litigation Senior Associate Lucy McPherson joined Robyn Hyland to discuss mutual Wills and why they may not be appropriate for all families.
What is a mutual Will and when is it appropriate?
The concept of a mutual Will is centuries old, originating from an English case in 1769 (Dufour v Pereira).
The primary purpose of a mutual Will is to try to keep assets of a deceased estate within the family.
A mutual Will allows for spouses or partners to provide for one another and for children of any previous relationships, whilst each party agrees to be legally bound and not to change their Wills without the other party’s consent.
With relationships and family structures continuing to evolve, and blended families becoming more common, mutual Wills are also becoming more popular.
There are two main differences that distinguish mutual Wills from the usual testamentary Wills that most people prepare and sign.
Firstly, both testators must properly understand and consent to the contents and instructions within the Wills.
Secondly, mutual Wills can only be revoked or changed with the permission of both parties. This means that the Will cannot be revoked or changed when one party passes away.
Mutual Wills, in effect, form a legally binding contract between the two people creating the documents. The appeal of this kind of arrangement is to ensure that effect is given to the intention of both spouses and not just the survivor.
By making a mutual Will, you ultimately provide a guarantee that the property will flow to the intended and agreed beneficiaries and that the surviving spouse cannot disinherit their stepchildren following the death of their spouse (which is a very common outcome with couples who have children from previous relationships).
Caution needs to be exercised in this kind of arrangement as the surviving spouse may find that they do not have the flexibility to deal with the contingencies that may arise throughout the rest of their life. This can include obligations that may arise if the surviving spouse re-partners and wishes to provide for a new spouse or additional children in their Will. In such circumstances, a mutual Will is likely to prove a recipe for litigation.
Challenging a mutual Will: The case of Forster v Forster [2022]
In the case of Forster v Forster [2022], a mutual Will was challenged by the son of the deceased. The application arose from a dispute over the deceased’s estate between the deceased’s son, Mr James Forster, and the deceased’s widow, Mrs Annabel Forster.
The deceased and Mrs Annabel Foster had each been married before they married each other. The deceased had three children from his first marriage, and Annabel had two children.
In the mutual Will made between the deceased and his wife, they agreed to leave their property first to the survivor, then upon the survivor’s death, the property was to go to their five children and stepchildren in equal shares.
In this case, the husband, Mr Timothy Forster, died first, leaving Annabel, to inherit his estate, per their mutual Will agreement. The mutual Will also stipulated some smaller gifts the deceased left to his biological children.
The deceased’s son, James, and his stepmother, Annabel, did not have a good relationship.
After Timothy passed away, throughout the administration process, James repeatedly requested that his stepmother disclose her financial position as he did not trust her. He suspected that she had, or would, breach the mutual Wills agreement.
Despite his suspicions, there was no evidence to support his position. James made repeated requests asking his stepmother to disclose her financial position, to which she declined, stating that she intended to comply with her obligations under the mutual Will.
In the face of Annabel’s refusal to provide her financial information, James applied for court orders mandating her to disclose her financial position to him each year until her death.
Relying on the ancient doctrine of mutual Wills and the case of Dufour v Pereira, James argued that his stepmother was essentially acting as a trustee of the estate and should be held accountable for disclosing her financial assets and activities to the beneficiaries named in the Will.
For James to succeed in his application, he needed to persuade the Judge of three things:
- That his stepmother held the property, subject of the Mutual Wills Agreement on constructive trust for her stepson during her lifetime; and if so
- That the pre-conditions for an order had been met. Including that the stepmother had done an act or made an omission or decision as trustee which aggrieved her stepson; and if so
- It was appropriate to make an order against the stepmother to account to her stepson for the property during her lifetime.
Ultimately, the Judge decided that the property subject to the mutual Wills agreement was NOT held in trust throughout the lifetime of the surviving party to the agreement.
It was also noted that the stepson only relied on his suspicion and mistrust of his stepmother, and he fell short of establishing reasonable grounds for apprehending that his stepmother might do an aggrieving act.
The stepson’s application was refused. The reasons that the Judge noted were:
- Timothy and Annabel Forster were married for 24 years. It was their second marriage each, and they had entered into a mutual Wills agreement intending to achieve, after their deaths, the equal distribution of their combined estate among their five children and stepchildren.
- Essentially under the mutual Will, the survivor was permitted to use the estate to maintain their standard of living and to pay for their necessary health and aged care but was not permitted to intentionally diminish it, including by making gifts to their children.
- The stepmother submitted that her stepson’s application was entirely misconceived. Also, it was based on a misapprehension of the Law of mutual Wills and constructive trusts. She argued that although the mutual Will imposed obligations upon her and the deceased, it did not “create” a trust.
- Without a constructive trust, she was not required to account to her stepson for her property during her lifetime.
In this case, the person who entered the mutual Will could prove that she had upheld her obligations and had no intent to diminish the estate or disinherit her stepchildren from receiving the estate upon her death.
Nevertheless, this case serves as a reminder that there are vital considerations people should be aware of when entering a mutual Will.
It must be understood that by entering a mutual Will agreement, you are accepting the burden attached to the estate. If you breach the contract, the beneficiaries will be entitled to bring an action against the surviving party to enforce the agreement.
The ancient doctrine of mutual Wills
Dufour v Pereira was foundational to the doctrine of mutual Wills. This historic case involved a husband and wife who executed a mutual Will, which left the property of the first to die to their survivor for life. Once the survivor passed away, the survivor’s property would be left to their children and grandchildren upon the survivor’s death.
In Dufour v Pereira, the husband died first, subsequently leaving the wife to inherit the property under the Will. However, she then revoked the Will and executed a new one, leaving her property to only one daughter instead of all children as initially agreed in the mutual Will.
The couple had executed the original mutual Will in Europe, but they had moved to England before the deceased passed away. The Law of England did not know of such a Will at that time. Yet, the case had to be decided by English Law.
The Judge noted that the Law of these countries was defective and destitute of the principles of good conscience and equity. The Judge then set out the principles that he saw governing the operation of mutual Wills under English Law. The principles outlined that if the survivor has deluded their partner into the Will upon the faith and persuasion that they would perform their part, they cannot be allowed to recall the contract after one party has died.
The document is evidence of the agreement made by both parties during their lifetime; if one party dies first, their death carries the agreement into execution. If the surviving party refuses, they are guilty of fraud and become a trustee, for no one shall deceive another to their prejudice.
Attwood Marshall Lawyers – Experts in Estate Litigation
While mutual Wills may be effective in binding couples to an estate plan and protecting assets for children in blended families, they do not offer flexibility or allow for unexpected events following the death of the first spouse.
Determining if a mutual Will is suitable will ultimately come down to your life stage and your unique family circumstances.
It is beneficial to discuss your testamentary intentions with an experienced and properly qualified estate planning lawyer who will be able to help you identify the best estate planning strategy to use.
If someone tries to change their Will in breach of a mutual Will that has been formed between two people during their lifetime, it is up to the beneficiaries under the original Will, which would usually be the stepchildren of the survivor, who would be entitled to bring an action in Court against the surviving party to enforce the mutual Will.
Attwood Marshall Lawyers have one of the largest and most experienced Wills and Estates Departments, with a dedicated team who practice exclusively in estate planning and estate litigation.
Our lawyers aim to ensure our clients receive what they are legally and fairly entitled to.
We are also well-versed in representing executors who are defending claims on an estate, to help ensure the wishes of the deceased can be upheld.
For enquiries related to estate and Will disputes, please contact our Estate Litigation Department Manager, Amanda Heather, direct line 07 5506 8245 or email aheather@attwoodmarshall.com.au.
Need to review your estate plan? Our estate planning lawyers can ensure you have the most appropriate strategy in place to reduce the risk of someone contesting your Will. For estate planning enquiries, contact our Wills and Estates Department Manager, Donna Tolley, on direct line 07 5506 8241, or email dtolley@attwoodmarshall.com.au
You can visit our experienced team at any of our conveniently located offices at:
Robina Town Centre, Coolangatta, Kingscliff, Brisbane, Sydney or Melbourne.
Read more:
Timeline of a Family Provision Claim (Contesting a Will)
Part 1: Contesting a Will can be a taboo topic – 10 common misconceptions explained
Advice for beneficiaries in a Will when there is a dispute
The importance of being represented by a lawyer specialising in estate litigation when resolving a dispute over an estate
