Mutual wills: a recent review

Insight

29.09.2023

An estimated one in three families in the UK are “blended”, a term used to describe a combination of parents, new partners, and children from different relationships. In some of these blended families, biological children and stepchildren are truly blended, to the extent that even when it comes to succession on death, parents make no distinction in terms of provision. However, this is usually not the case. Very often, for example, a testator (“T”) will wish to benefit a later spouse (“S”) but on the understanding that when S dies, those assets that derived from T should pass down to T’s biological children rather than to S’s children.

Under English law, the life interest trust allows that to happen. Designated assets are ringfenced to pass on after S’s death in accordance with T’s pre-ordained wishes. However, the life interest trust is not a hugely flexible vehicle. S may wish for the certainty that access to capital brings, which may not be available, or for a clean break from the ultimate beneficiaries. In reality, S will often feel unhappy with this arrangement and T may also feel uncomfortable with it.

The doctrine of mutual wills is a legal doctrine that can potentially offer a solution. The defining characteristic of a mutual will is that it must reflect a contractually binding agreement between the testators to leave wills in a certain form. So, for example, in the case above, T and S could agree that the second to die will leave assets in a certain way, for example split equally between the survivor’s biological children and stepchildren. To be effective, this agreement must be contractually binding. A moral obligation is not enough. The effect of entering into such a contractually binding agreement is that an equitable obligation arises, which binds the conscience of the surviving testator, and which is imposed for the benefit of those who take under the mutual wills.

The advantage of the doctrine is that, arguably, assets left under a mutual will are more freely available to the surviving spouse than assets left on life interest trust: for example there are usually no restrictions on access to capital.

However, mutual wills are rare, for good reason. This is partly because their legal impact is unclear. For example, it is agreed that the effect of a mutual will is to bind the conscience of the surviving testator, but what is the scope of the obligation on the surviving testator? Mutual wills have been described as creating a “floating trust” over property, but to what property does that trust attach? Does it only attach to the property which was in existence on the death of the first testator (the “Original Property”)? Or does it also attach to property derived from the Original Property arising out of, for example, shrewd investments made by the surviving testator between the death of the two testators? What about remarriage, which would normally revoke a will?

Two recent cases provide excellent examples of the difficulties arising from attempts to make mutual wills.

In Naidoo v Barton [2023] EWHC 500 (Ch), Dr and Mrs Naidoo made their purported last wills in 1998, shortly before the death of Dr Naidoo. Each will referred to the other, expressly providing that they were intended to be mutual wills. Both wills appointed the surviving spouse and one son, David Barton, as the executors, and provided that the residuary estate of the first to die should pass to the surviving spouse and then on the second death to Barton absolutely.

16 years later, in 2015, Mrs Naidoo made a new will naming Barton’s younger brother, Charan Naidoo (“Naidoo”), as executor and sole beneficiary. Barton denied the validity of the 2015 will and asserted the validity of the mutual wills agreement.

Naidoo sought an order pronouncing the validity of the 2015 will and requesting rescission of the 1998 will on the grounds of mistake and undue influence. The court rejected the argument based on mistake, but it accepted that the will was the result of undue influence. The court found that the making of the mutual wills was a transaction calling for an explanation, raising a presumption of undue influence, and that Barton had not rebutted that presumption by establishing that his parents acted free of his undue influence.

Often mutual wills are overturned as they fail to reach the threshold required to create a contractually binding agreement (see McLean v McLean below). It is interesting that, in this case, the will was overturned on the basis of undue influence. Usually, to invalidate a will on the basis of undue influence would require a finding of improper pressure or coercion. One is not usually assisted by a presumption in the case of wills, as one is with lifetime transactions. However, in this case, the court’s finding was based on the test that is usually applied to undue influence in relation to lifetime transactions: namely that the relationship raises a presumption of undue influence, which the propounder then needs to rebut by showing the transaction was made free from influence. This presumably reflects the fact that it was the validity of the agreement to enter into mutual wills that was under investigation, rather than the validity of the will itself, one of those very “legal” distinctions which can seem fairly arbitrary.

It is worth noting that Barton defended his claim mostly by video as he was serving a seventeen-year prison sentence following his conviction for dishonesty and fraud offences relating to elderly residents at his nursing home (the “Fraud Case”). The Judge (HHJ Cadwallader) regarded the Fraud Case to be highly relevant to the matters at issue in these proceedings. He noted that the Judge of the Fraud Case had described Mr Barton’s actions against his care home residents as “one of the most serious cases of abuse of trust that he suspected he had ever come across in this country”. One suspects this cannot have helped his cause when the allegation is one of undue influence!

A distinguishing feature of this case was the duration of time between the first and second death. Could Mrs Naidoo really be expected to be bound into her promise for sixteen years? It is clear that the potential to be locked into a will for many years creates real problems for the doctrine. If there is a substantial gap in time between the point of signing the mutual wills and the point at which the legal impact is felt after the second death it may be harder to evidence and, indeed, justify the contractual obligation. The assets in that period will also have changed shape and it will most likely be harder to determine the legal impact of the doctrine, and over what assets the equitable obligation “floats”.

In the recent case of McLean v McLean [2023] EWHC 1863 the fact pattern was rather different.

Reginald and Maureen McLean made mirror wills in mid-2017 leaving their estates to each other, and then between their children in equal shares. Very shortly after Reginald died in 2019, Maureen revoked her will leaving her entire estate to her son effectively disinheriting Reginald’s children, her three stepchildren. She died a few weeks later. When drafting the wills in 2017, Maureen had stated that she would not change her will to disinherit Reginald’s children. Reginald was advised that there was nothing to stop Maureen changing her will, but he said that after a marriage of 45 years he trusted her implicitly.

The claimants claimed that the doctrine of mutual wills operated to prevent Maureen from revoking the 2017 will. They claimed that the implicit trust shown by the couple in drafting the wills, together with a joint letter written to all four children explaining what they had done and that there would be no further changes, was sufficient.

The court did not agree and found that there was no binding contractual agreement not to revoke the wills. The agreement reflected a moral but not a legal obligation.

The claimants also claimed that the doctrine of mutual wills could and should be extended to allow an estoppel argument to succeed. They argued that, in reliance on the assurance made by Maureen, Reginald acted to his detriment in executing (and not revoking) the 2017 will. Again, the court did not agree. The evidence did not support a finding that Reginald made his 2017 will on the basis of Maureen’s assurance, and therefore the claimants had not shown that a proprietary estoppel had arisen.

Conclusion

Successful mutual will claims are rare, and these recent cases show that they remain fraught with difficulty. Even where the outcome seems so manifestly unfair, as in the case of McLean v McLean, the equitable doctrine is not available to assist. This seems to me a little disappointing. As set out in the Supreme Court decision in Guest and another (Appellant) v Guest (Respondent) [2022] UKSC 27: "One of the principal functions of equity is to put right injustice to which the law is otherwise blind, by restraining the rigid application of legal rules where their implementation would be unconscionable." However the Judge in McLean did leave us with a modicum of hope which may be available on a different fact pattern: “At least as a matter of principle, it is not easy to see why an estoppel should not operate in the realms of mutual wills if the evidence were clear enough […] Mutual wills operates in the realms of equity in order to prevent injustice, and that is what estoppels do as well” [para 42]. We will have to see whether this argument gains any traction in the future, but these cases do not come along very often, so it may be a considerable wait!

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.