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Mutual Will Severs Joint Tenancy

While mutual wills are rare, consideration should be given whenever reviewing them as to whether any prior property owned in joint tenancy has been severed by the execution of mutual wills.

That was the situation in Szabo v. Boros 58 WWR 247, where joint tenants of real property, orally agreed in the presence of the plaintiff, to make wills by which each would leave his or her interest to his or her daughter, subject to a life interest to the other testator. The joint tenants then went and executed wills in accordance with the verbal agreement.

It was held that the oral agreement, followed by the mutual wills, operated to sever the joint tenancy in the real property which existed prior to the mutual wills, which in themselves created a trust in favour of the plaintiff in respect of  one half interest in the property.

With respect to mutual wills, the court cited the passage from Stone v. Hoskins ( 1905) P 194:

” were two persons have made an arrangement as to the disposal of their property and executed mutual wills in pursuance of that agreement, and one of them who predeceases the other dies with the implied promise of the survivor that the arrangement shall hold a good; and if the survivor, after taking a benefit under the arrangement, alters his will, his personal representatives takes the property upon trust to perform the contract, for the will of the one who died first has, by the death, become irrevocable”

mutual wills are not a good idea in modern estate planning and to a large degree are an anachronism that practitioners rarely see any more. The law is very clear that when parties enter such testamentary arrangements, they are essentially agreeing in a contract with the other to not alter the will ever, and if the survivor does so, the beneficiaries under the previous will that had been altered contrary to the agreement, has a claim in trust.

It is important to note that when most partners do wills where they leave everything to each other and alternatively to their children, or something akin to that, this does not create a mutual wills situation, and instead is called a mirror will, which is perfectly all right.

 

 

 

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