Following on from our article regarding mutual wills https://www.qbmlawyers.com.au/estate-lawyers-gold-coast/estate-lawyers-gold-coast-mutual-wills/, the Queensland Supreme Court has recently considered whether Mutual Wills had come into existence without any express statement in the Will that they were mutual.
Relevantly, this was a matter in which a husband and wife had made “mirror wills” (ie giving their estate to each other, and then giving their estates to the same beneficiaries if they both passed). A few years after the wills were made, the husband made another will under which, if his wife passed, he gave more of his estate to his relatives than to the relatives of the wife. The husband died a few years after the wife passed, at which time the relatives of the wife (or at least one of them) was unhappy at the change of the will which resulted in the relatives of the wife receiving less of the estate. He brought an action claiming that the wills were mutual wills and that the husband could not change his will without the consent of the wife, and that once she lost capacity the wills could not be changed at all.
The action failed. His Honour Justice Kelly in the Queensland Supreme Court made the following observations about previous decisions concerning Mutual Wills:
- The starting point is that a Will is revokable and may be revoked by making a later will. At the heart of the doctrine of Mutual Wills is the existence of a formal, legally binding agreement, often between husband and wife, not to revoke the effect of the two wills which are made together and essentially on the same terms;
- What is needed to establish Mutual Wills is proof that the parties made an agreement to execute their wills in reciprocal terms and – expressly or by implication – they contracted not to revoke (change) those wills;
- Mutual Wills arise when two people agree to make wills in particular terms and agree that those Wills are irrevocable and that they will remain unaltered;
- Substantially similar or even identical wills are not Mutual Wills unless there is an agreement that they will not be revoked;
- Making Wills simultaneously and with similar terms is not enough to establish an agreement not to revoke them;
- Even though a will (and even a Mutual Will) is revocable, if there is a Mutual Will, then an action arises to make the survivor behave in accordance with the Mutual Will;
- A common reality is that a married couple might make informal agreements about their wills which are not intended to be legally binding. The couple might trust each other in point of honour to deal fairly and reasonably in light of the circumstances as they might arise during the survivor’s lifetime;
- Perhaps most husbands and wives make wills by agreement but they do not bind themselves not to revoke their wills and do not intend to undertake or impose any kind of binding nomination.
On the facts that were under consideration, there was not sufficient evidence of an agreement to the effect of a Mutual Will.
As we have discussed in our article on Mutual Wills, a lawyer should be extremely cautious about taking instructions to act on behalf of a couple in making Mutual Wills. The will – in essence – could result in the surviving spouse being unable to effectively make a new will for decades, in circumstances which are changing. As an example, the Mutual Will might give assets to beneficiaries who later turn on the survivor and make their life a misery but the survivor will have no ability to remove them from their entitlement to benefit. There could be other circumstances that change such as a remarriage, a beneficiary becoming bankrupt (as a result of which the trustee in bankruptcy could receive the inheritance, a charity being dissolved or any other number of situations which would ordinarily result in an updating to wills. If it is good practice to review and update wills every three to five years, then it cannot be good practice to have a will which could bind someone for 30 years or longer.
For enquiries regarding mirror or mutual wills, please contact Peter Muller at peterm@qbmlaw.com.au or Jessica Murray jessicam@qbmlaw.com.au
