What is a Mutual Will?
The starting point for any discussion on wills is that a person may always revoke his or her Will. This may even happen unintentionally, as each time you marry, law dictates that your Will is revoked.
A mutual Will is a binding agreement that parties will dispose of property by a Will in a certain manner, and that they will not change their Wills.
What is a Mutual Wills Agreement?
A Mutual Wills Agreement is a written agreement between two spouses to execute Wills and to not change or revoke their Will without notice to the other spouse. This is a contract at law, and there must be evidence of this. Once made and one of the parties dies, the agreement become irrevocable.
Often the spouses prepare mirror Wills and at the same time sign a mutual wills agreement containing the appropriate language.
Why would we want mutual wills?
These Wills are often considered when one spouse (or both) has concerns or fears that they may die leaving assets to their spouse, and the surviving spouse may subsequently remarry. The newly married spouse may then leave their assets to their new partner, or their new partner’s children, leaving the testator’s children or intended beneficiaries inadequately provided for. A mutual wills agreement can provide peace of mind that this situation has been avoided, as the courts will give effect to the agreement.
Can I revoke the agreement?
Either party to the agreement may revoke the agreement during their lifetime, with due notice to the other party. However, once the first spouse dies, and the second spouse receives the benefits of the first spouses’ Will, then the agreement becomes irrevocable. The agreement will also become irrevocable when one of the living spouses is unable to alter their Will due to incapacity.
What happens if the surviving spouse does change their Will?
A mutual wills agreement operates to create a trust in favour of the beneficiaries named in the Will. The trust becomes “locked-in” when the first of the spouses dies. If the surviving spouse later changes their Will and does not adhere to the terms of the mutual Will, the beneficiaries then have an action for a declaration of a constructive trust.
What this permits the Court to say is that the second spouse broke an agreement, and in fairness they cannot change the agreed upon distribution of the assets.
Alternative to Mutual Wills
Another method that may accomplish this goal would be to create a qualifying spousal trust.
Where do I find out more information on mutual Wills?
As usual, the law on mutual Wills, their creation, operation, and enforcement, is more complicated than can be addressed in a short period of time. Often people think that their estate is not large and does not require attention, or that their Will is a simple matter. This is a big mistake, especially if you wish to provide for several beneficiaries. Estate litigation, litigation over your assets after you have passed on, is very destructive to your family who remain, as well as extremely costly. It can be avoided with a well thought-out estate plan. It is important to realize, there are always good estate planning options.
Please see an estate planning lawyer, and ask the questions you have on your mind.
If you would like to know more about Estate Planning, including a Mutual Wills Agreement, please do not hesitate to contact Steve Andrea at Heritage Law.