What is a Mutual Will and why would you want one?

If two (2) people agree to make wills in certain terms and further agree that the wills are not to be revoked, these are considered to be mutual wills, also known as reciprocal or corresponding wills (Mutual Will).  A common scenario involving Mutual Wills is where spouses agree to leave their estate to each other absolutely, and that their children will take the estate of the survivor upon their death in certain proportions.  Mutual Wills are required to include particular clauses which are intended to prove testamentary intent.

Why would you have a Mutual Will?

A Mutual Will is one method of protecting assets for a particular beneficiary.  For example, where a husband and wife enter into a Mutual Will with their children as the end beneficiaries, a subsequent re-marriage by the surviving spouse does not revoke the obligation for the deceased spouse’s estate to be held on trust for the children of the first marriage.  Nevertheless, unless otherwise agreed, the surviving spouse can use and enjoy the aggregate of their estates during their lifetime as if they have full ownership.

Defining features of a Mutual Will

Such wills may take the form of a joint Mutual Will or separate Mutual Wills.  Regardless of the form of the will, the agreement not to revoke is an essential element.  As such, two (2) wills made at the same time with substantially similar provisions will not necessarily be Mutual Wills if the agreement not to revoke is not present.

There must be a clear mutual intention not to revoke the wills and not some loose understanding or sense of moral obligation that the survivor will leave their estate to a particular beneficiary.  It is possible, and in fact common, for an agreement for Mutual Wills to be made orally (with some exceptions), though it is preferable to have such arrangements recorded in a deed and/or in the Mutual Will itself, for example with a clause to the effect of:

“I have been advised of the ability to agree or contract to make a will a certain way, and then not to change it (without the consent of someone else) or to do anything to diminish the value of the promise.  I and my spouse have agreed that in consideration of each of us making our wills a certain way, neither of us will change our wills without the consent of the other, or if the other has died the consent of his/her personal representatives, and provided the will of the first to die is substantially carried into effect, then the survivor is not to change his or her will without consent, nor to diminish the value of our estate by gifting or transferring for less than its value any of our assets to other persons, reserving the right of the survivor to utilise his/her assets for their own living and benefit”.

In order to prevent any confusion, wills which are not the subject of an agreement not to be varied, but rather are independent documents that can be changed whenever the testator feels motivated to do so, usually contain a provision to the effect of:

“I declare that this will is NOT made in performance or fulfilment of any agreement with my spouse to make mutual wills.  My spouse and I agreed at the time of execution of this will and of his/her will (under which we benefit from each other’s estate) that each of us is free, before and after the death of one of us, to change his/her will any way he/she wishes”.

Can you ever revoke a Mutual Will?

Secretly revoking or altering a Mutual Will is in essence a breach of contract which may entitle the disappointed party to a remedy of damages or specific performance.  The measure of damages is the value of the interest lost to the beneficiaries.  However, revocation and alteration are permissible if one party gives notice to the other of their intention to revoke or alter the Mutual Will.

Further references

Related articles by Dundas Lawyers

Memoranda of Wishes

What is a Family Provision Application?

What is a Testamentary Discretionary Trust and why would I want one?

Legislation

Succession Act 1981 (Qld)

Further information

If you need advice on Mutual Will or your estate planning, please contact us for an obligation free and confidential discussion.

Malcolm BurrowsMalcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.

Legal Practice Director

Telephone: (07) 3221 0013 (Preferred)

Mobile: 0419 726 535

e: mburrows@dundaslawyers.com.au

 

 

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

 

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