Mutual wills are a common estate planning tool. Typically, a couple agrees to leave all or most of their estate to the surviving spouse, who then agrees to provide irrevocable gifts over to children. Mutual wills are premised on an agreement between the spouses that following the death of one of them, the other won’t change their will to defeat their current joint intention. The courts explain the doctrine of mutual wills af follows:
“Where the requirements for the application of the doctrine are satisfied, the survivor will not be permitted to defeat the agreement by revoking his or her will after the death of the other. This result is achieved by the imposition of a constructive trust on the survivor’s estate for the benefit of those who were intended to benefit under the agreement.
The most fundamental prerequisite for an application of the doctrine is that there be an agreement between the individuals who made the wills. It has been repeatedly insisted in the cases that:
- the agreement must satisfy the requirements for a binding contract and not be “just some loose understanding or sense of moral obligation;
- it must be proven by clear and satisfactory evidence; and
- it must include an agreement not to revoke the wills.”
This irrevocable aspect of mutual wills clashes with the general proposition that, if a testator is mentally competent, they are able to revoke their will. Ordinarily, if one spouse dies leaving all to the other, then the remaining spouse is entitled to change their will to leave their estate, for example, to a second spouse instead of the couple’s children (subject to a probable Wills Variation Act claim).
The problem of enforcing mutual wills arises most frequently where there are second marriages and children from the prior marriages. In such cases, can a second spouse, who inherits all of their deceased spouse’s estate, then change their will to favour, for example, their own children over the deceased’s children?
If done properly, this type of scenario can be prevented and all the unpleasantness it brings avoided. The recent decision in Re Wright Estate is a good example.
In this case, Mr. Wright, a widower, brought considerably more wealth into his second marriage than his impecunious bride. Both had children from earlier marriages. Following their wedding, they retained a lawyer to assist with their estate planning. Mr. Wright wished to provide for his second wife during her lifetime but leave the remainder of his estate to his children. The second Mrs. Wright wanted the security of an income and a place to live during her lifetime, to leave her own children a small bequest and to have the remainder of Mr. Wright’s estate go to his children on her death.
Following a number of well-documented meetings with their lawyer, the Wrights executed mutual wills which, among other things, committed each of them to irrevocably do certain things in reliance on the other’s promise to do the same. In particular, Mr. Wright irrevocably agreed to register a life estate on his property in favour of his second wife, transfer certain RRIFs to her and grant her a life estate on his other assets. The second Mrs. Wright executed a will which provided that the residue of her estate, after small bequests to her children, would go to her husband or his children if he predeceased her. This bequest was expressly stated to be irrevocable and made in consideration for the transfer to Mrs. Wright of the life estate and RRIFs.
Mr. Wright later died. The second Mrs. Wright changed her will to provide that her estate was to be divided equally between her children. Mr. Wright’s children were to get nothing.
Mr. Wright’s children then sought to enforce the irrevocable aspect of their step-mother’s previous will. After commending the Wright’s solicitor for the detailed notes he took and the comprehensive advice given, the Court went on to enforce the irrevocable aspects of Mrs. Wright’s previous will. Relying on his spouse’s promise to include in her will the irrevocably bequest to his children, Mr. Wright had transferred various assets and rights to Mrs. Wright during her lifetime. This constituted evidence that there was an enforceable agreement between the Wrights which included a promise not to revoke her will. In such cases:
“equity considers it a fraud upon the deceased, who has acted upon and relied upon the mutually binding nature of the agreement, for the survivor to change the will and break the agreement. As the deceased cannot intervene to enforce the obligation, equity will enforce the survivor’s obligation, despite the survivor’s subsequent intentions.”
In many other cases, the courts have been unable to find the “clear and unequivocal” evidence needed to enforce the promise not to revoke a mutual will. In this case however, largely because of the detailed notes of their lawyer, the Wrights were found to have gone “beyond trusting each would do the right thing or that each would provide fairly for the other’s children”: they were found to have entered into a binding, irrevocable agreement that the court would enforce.
If there is a cautionary note to be sounded, it is that a competent solicitor ought to be retained where the enforceability of mutual wills is an important consideration for a couple in their estate planning. The evidence of that solicitor in subsequent legal proceedings may carry the day on whether the mutual will is enforceable or not.