Mutual Wills vs Mirror Wills Explained

Mutual Wills vs Mirror Wills Explained

In my experience, there is a lot of confusion amongst the public as to the difference between a mutual will and a mirror will, with the latter often being mistaken for the former.

Mutual wills are actually very rare – I have seen two in over 45 years of practice and they were both identified as a mutual will and both testator signed the same document wherein they contracted with the other that the survivor would not be able to vary the bequests in the future.

A mirror will typically contains gifts by each to the other of their respective estates, with the same contingent gifts over of the residue of the estate of the survivor of them. Typically, this is a husband and a wife, leaving everything to each other, and in the event that the other fails to survive for a certain period of time, such as 30 days, then to alternate beneficiaries who are usually their children.

A mutual will is much more than a mirror will, it is an agreement that the wills not be changed and is a constraint of testamentary freedom. It contains a contract between the parties to the mutual will that the will not be changed after the death of one of the parties.

The testamentary intentions of will makers expressed in their mirror wills is not enough to establish that they had agreed that the survivor would not be able to vary the bequests in the future.

A true mutual will therefore is a binding contract between typically spouses not to revoke or change or replace their wills. It is an agreement between the parties to dispose of their estate in a particular way that equity and forces through the mechanism of a constructive trust after the first of the spouses of died, if the survivor does not abide by their agreement. Oosteroff On Wills 8th Ed at pp127-28.

The most fundamental prerequisite for an application of the doctrine of mutual wills is that there be an agreement (contract) between the individuals who made the wills.

The mutual wills agreement must satisfy:

1) the requirements for a binding contract and not be just some loose understanding or sense of moral obligation;
2) it must be proven by clear and satisfactory evidence;
3) it must include an agreement not to revoke the wills. Edell v Sitzer (2001) 55 O.R. 198 at para.73

In Bellinger v Nuytenn Estate 2002 BCSC 571 . The court held that honor is not a sufficient foundation on its own, and that a mutual will agreement will not be found to exist for the evidence is more consistent with some loose understanding or moral obligation rather than a binding, enforceable agreement.

The agreement may be proven either from the words of the will itself or from extrinsic evidence. The extrinsic evidence does not necessarily have to come from documents and it may be hearsay testimony from interested parties, but the courts have held that mere assertions from which inferences should be drawn are not acceptable as reliable evidence, to prove the existence of a mutual will agreement. Trotman v Thompson 2006 OJ No. 681

The burden of proof rests with the party that alleges the existence of a mutual will agreement, and that onus is heavy in that there must be clear evidence of the mutual will agreement. Cassin v Cassin (2007) 30 ETR 289 at para. 37

Mutual Wills Create Constructive Trusts

Mutual Wills Create Constructive Trusts

Mutual wills as opposed to mirror wills, are not very common, but when they exist and  breached, that breach creates a trust that can be used to trace the assets into the hands of third parties.

Mutual wills are not a good idea for estate planning purposes and should be avoided except in unique circumstances.

In order for the breach of trust to occur, there must firstly be a contract between the parties not to change their wills and to provide for the other as per the terms of the mutual wills.

The mutual wills  are usually and should be accompanied by a written contract where  the parties essentially contract with the other not to ever change the terms of the mutual wills that they are signing.

The overwhelming number of parties who do will providing for each other do NOT do mutual wills but instead do mirror wills.

What may occur after the death of the first party to the contract,  the survivor as time goes on may  change his or her will to benefit other parties that the estate of the first to die.

If the mutual will is properly executed and the breach of trust is proven to have occurred, the  courts may award a constructive trust over the assets that should have formed part of the estate, and order that they are held in trust for the beneficiaries of the estate of first to diet

The authorities have consistently supported the proposition that a person cannot avoid a mutual will agreement by making dispositions of a testamentary nature.

Most authorities go further and support the proposition that a person cannot make any disposition intended to defeat the agreement, whether testamentary or not.

Barns v Barns [2003] HCA 9, at paras. 163-4;  Flocas v Carlson [2015] VSC 221, at para. 192; Healey v Brown, [2002] EWHC 1405 (Ch), at paras. 13-14; Russo & Ors v Russo & Anor [2009] VSC 491, at para. 32; Youdan, T. G. “The Mutual Wills Doctrine” (1979) 29 U.T.L.J. 390, at 410-414; Oosterhoff, supra, at 140-142, 152-3; Croucher, supra, at 405

In the Australian case of Bigg v Queensland Trustees Ltd, [1990] 2 Qd R 11 as well as a number of Canadian cases that were decided before it,  state that where a person has acted to his or her detriment in reliance on an agreement to make irrevocable mutual wills, the court will enforce the agreement against the first to die in the same way as the traditional doctrine enforces the agreement against the survivor.

In Bigg v Queensland, the plaintiff, Mr. Bigg, and his wife, Mrs. Bigg, executed irrevocable mutual wills, which left their estates to each other, and on the death of the survivor, all of the assets divided equally between their four children (each had two from a previous marriage).

Mrs. Bigg died first, after having secretly made several new wills, which essentially left Mr. Bigg with just a life estate. Not knowing that Mrs. Bigg had revoked the mutual will, and still believing that he would be the sole beneficiary of her estate, Mr. Bigg transferred some of his investments into Mrs. Bigg’s name (for tax reasons).

After Mrs. Bigg’s death, Mr. Bigg sued the estate, claiming that the executor held all of the estate assets in trust for Mr. Bigg, and damages for breach of contract in the alternative.

In his judgment, McPherson J. (Supreme Court of Brisbane) questioned the reasoning in Stone v. Hoskins, and ultimately held that equity could not allow Mrs. Bigg to secretly change her will, while permitting Mr. Bigg to continue acting to his prejudice on the assumption that their agreement was still in place. On that basis, the court declared that the defendant executor held Mrs. Bigg’s net estate in trust for Mr. Bigg.