Mutual wills, also known as mutual will contracts, are wills that form a legally binding contract between two people that has the effect of:
- Having both of the wills drafted in terms that are agreed by the parties making the wills; and
- Prohibiting either party from revoking or amending their will without the agreement of the other. This means that following the death of the first party, both wills are from that point irrevocable and cannot be amended.
When Mutual Wills Are Used?
Mutual wills are most commonly used between husbands and wives who have remarried and have children from a former marriage.
A mutual will guarantees that property flows to the intended and agreed beneficiaries and a surviving spouse cannot disinherit their step-children following the death of the first spouse.
Common scenarios include:
- A testator wishing to gift their estate (or its portion) to their surviving spouse to ensure that their wealth passes to the testator’s children on the death of the surviving spouse. A mutual will would ensure upon the death of the testator the surviving spouse cannot amend or revoke the will to disinherit the surviving spouse’s step-children. In this scenario, subject to the surviving spouse not breaching the contract formed between the parties, a mutual will can ensure that the testator’s children are the “ultimate beneficiaries” of the testator’s property.
- A testator wishing to gift their estate directly to their children without gifting any interest to the surviving spouse. In this scenario, again subject to the surviving spouse not breaching the contract formed between the parties, a mutual will could prevent the surviving spouse from making a family provision claim against the testator’s estate.
This list is not exhaustive and is not confined to husbands and wives. Mutual wills may be made between any two people who wish to bind each other to an estate plan.
What if One Party Changes or Revokes Their Mutual Will Without the Consent of the Other?
Some courts have stated that if the surviving party revokes their mutual will following the death of the first party, they would be committing fraud as they have accepted the benefit under the first party’s will without accepting the burden attaching to it.
If a party changes their will in breach of the contract formed between the parties, it is the beneficiaries under the original will (usually the step-children of the survivor) who would be entitled to bring an action against the surviving party to enforce the original mutual will.
What are the Advantages and Disadvantages of Mutual Wills?
Young couples making mutual wills may find this arrangement to be limiting in the future.
For example, if one spouse dies, the surviving spouse may remarry and wish to provide for their new spouse in some way under their will.
If the surviving spouse has a mutual will with their deceased spouse, they will be prohibited from changing their will in any way to accommodate their new marriage. They will be unable to provide for a new spouse even if the intention is to provide for the new spouse out of the surviving spouse’s portion of the asset pool only while still providing for the deceased spouse’s children in the same way and amount as was intended under the mutual wills.
A surviving spouse may also reduce the effect of a mutual will even if they do not change or revoke their will by using up the funds in the asset pool in the surviving spouse’s lifetime, leaving very little to be distributed to the surviving spouse’s stepchildren of the death of the surviving spouse.
A testator may wish to consider building a Testamentary Discretionary Trust mechanism into their will to place controls around the use of the funds in the surviving spouse’s lifetime, or making a substantial direct gift to the testator’s children upon the testator’s death if they consider this to be a risk.
A significant advantage of a mutual will is that while a couple may have discussed and agreed upon how their estates will be left on their death, there is no legal obligation for an individual to leave their estate in the manner discussed.
Therefore, a testator may wish to place more than a “moral obligation” on their spouse to leave their estate as has been agreed.
A mutual will would be effective in placing a “legal obligation” on the surviving spouse in this regard.
Should All Couples with Blended Families Use Mutual Wills?
Mutual wills are not suitable for all blended families.
While they are effective in binding couples to an estate plan, they do not provide flexibility or allow for unexpected events following the death of the first spouse.
We generally suggest that couples in the later stages of life may find mutual wills to be beneficial. It’s less likely that they will encounter significant life-changing events following the death of the first spouse such as a permanent disability or a remarriage.