06 September 2017

A rare example of success: mutual wills - daughters in fight with their own children


A mutual will is one which cannot be changed and may even restrict a person's freedom to deal with his or her property (referred to in the Will) during their lifetime.

The law of mutual wills means if you and another make wills coupled with a legally binding promise not to change them, the survivor cannot then make changes following the death of the other (who kept his or her promise and now has no opportunity to make changes).

If established they create an interesting conundrum. The executors of the last Will find they are validly appointed but they have to administer the estate on the terms of the earlier 'mutual Will'.

That is merely one of the many difficulties presented by cases such as the very recent Legg v Burton where Ann Legg and her sister, Lynn Burton, found themselves in bitter dispute with Lynn's sons, Aaron and Michael.

Background

June and Bernard executed Wills in mirror terms in July 2000. They left their entire estates to each other 'absolutely and beneficially and without any sort of trust obligation' and on the death of the survivor to their two daughters, Ann and Lynn.

Ann's evidence was that she had been present at the time her parents executed their Wills. She said the solicitor had told her parents that 'the law cannot stop someone from changing their Will in the future' but that he was 'aware that [they] never wanted to change their terms again, and that their trust in one another not to make any future changes was enough'.

Ann and Lynn gave evidence that Lynn had arrived subsequently and their parents then explained the terms of the Will to her and explained 'their agreement that these Wills were to be further 'set in stone' and never changed again'.
At the time, Aaron and Michael were still minors. Bernard died in May 2001.

In 2004 June expressed a wish to add a granddaughter, Michelle, who had just become engaged, to her Will. Lynn, however, reminded her mother of her promise to Bernard not to change her Will and Lynn's evidence was that her mother said she would not do so after all. It became apparent that June had, in fact, already made the change but she made another Will five days later removing Michelle as a beneficiary.

The 2000 Will and the subsequent 2004 Wills were the first of more than a dozen wills made by June that, by and large, progressively favoured grandchildren at the daughters' expense.

June's relations with Ann and Lynn deteriorated from around 2010 coinciding with Ann's own daughter being diagnosed with cancer (from which she subsequently passed away in 2012).

As Ann and Lynn became less able to provide support to their mother, Lynn's sons, in particular, took on the role of carer.

The last Will, which June made in 2014, left £10,000 to Ann and £30,000 to Lynn, but the vast bulk of her estate to Aaron, Michael and other grandchildren.

The law

Those relying on the equitable doctrine of mutual Wills must prove, on the balance of probabilities, that there was a legally binding agreement between the two testators that both would make their Wills in a particular form (not necessarily mirroring the other) and that they would not revoke them.

The doctrine of mutual Wills does not theoretically take away the ability to make a new Will revoking the mutual Will. But it does impose a legally binding complication meaning the executors under any subsequent Will must administer the estate in accordance with the mutual Will. So the practical effect is that a mutual Will is only revocable in accordance with the agreement (if at all).

The standard of proof is the usual civil standard; that is on the balance of probabilities. But where something is inherently improbable, it takes more cogent evidence to persuade a court to find on the balance of probabilities that something indeed has been established.

The decision

The Judge complained that much of the evidence was irrelevant to the question of whether mutual Wills had been agreed. In particular, he was not interested in allegations by Lynn and Ann that Aaron and Michael were involved in criminal activity. These are matters for the criminal court.

The Judge found that there were too many features of the evidence pointing against a finding that the daughters' memories were unreliable. These included June's pride in having a home to pass to the next generation, the inclusion of her daughters in the will making process and, above all, the desire in 2000 to make the Will once and to do it right.

The fact that June had undone a change she made to her Will in 2004 when she was reminded of her agreement with Bernard was also compelling.

Thus he decided that the daughters had succeeded despite the inherent improbability of mutual wills.

The effect of the doctrine of mutual wills is that whatever was left in June's estate at her death is held by her executors on trusts reflecting her agreement with Bernard. Therefore, they must administer her estate in accordance with her mutual Will, not the latest Will which appoints them.

Judge tells senior Judges they are wrong

Interestingly, the Judge points out, respectfully, that a recent Court of Appeal decision about mutual wills is wrong.

The Court of Appeal decided that mutual wills arise on the basis of legally binding agreements. A legally binding agreement about real estate must be in writing. Therefore, where the mutual will contains a specific gift of land, the Court of Appeal held that the agreement not to revoke must also be written down.

The Judge, however, explains that promises upon which another reasonably relies to his or her detriment still bind a promise-maker in the same way as a contract, even in respect of land. So, he says, mutual wills can be founded either on formal contracts or informal promises (ie proprietary estoppel).

The Judge was being particularly brave as he didn't need to decide this particular point because June and Bernard had not included a specific gift of their house – it just formed part of the residuary estate gifted 'absolutely and beneficially'.

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