Mutual Wills: To Bind or Not to Bind?
When it comes to estate planning there are various types of Will available, each with their own advantages and disadvantages. One type of Will, which is rarely made and often leads to disagreement, is the mutual Will.
What are mutual Wills?
Mutual Wills are Wills where two people (usually spouses or civil partners) promise they will not change or cancel their Wills in the future without the consent of the other person. Death of one of the parties does not release the survivor from the agreement which essentially means the terms of the Will will remain binding on the survivor on first death; he or she cannot make a new Will in the future disposing of any assets covered by the agreement.
It is important to note that there must be an agreement between the parties that the Wills are to be irrevocable to establish a mutual Will. A mere shared intention or wish is not enough.
What is the difference between mutual Wills and mirror Wills?
Mutual Wills involve an agreement between two people that neither will change or cancel their Will in the future without the consent of the other person.
Mirror Wills on the other hand are made when two people make Wills on the same or similar terms but they can be changed by either person at any time in the future without the consent of the other party.
What are the advantages of mutual Wills?
One the main advantages of mutual Wills is that they can avoid the risk of the surviving party changing their Will after first death. This can seem an attractive proposition particularly in cases of second marriages and blended families where each person may wish to ensure that both their new spouse and their own children are provided for after their death.
What are the disadvantages of mutual Wills?
One of the main disadvantages of mutual Wills is the fact they are inflexible and are incapable of catering for changing personal and financial circumstances. This is not ideal particularly where a long period of time may pass between first death and the death of the survivor.
There is also a strong risk of dispute when it comes to mutual Wills. Disputes can arise over whether Wills were intended to be mutual as the required agreement does not have to be stated in the Wills themselves and does not even have to be in writing! Disputes can also arise where the scope of the agreement (i.e. what assets are covered by the agreement) is not clear. Mutual Wills do not impact on assets which pass by survivorship and so there is no guarantee that the wishes of the first person to die will take effect in respect of such assets.
What are the alternatives to mutual Wills?
There are alternatives to mutual Wills with the most common being the use of a life interest trust. The use of the trust will allow the estate of the first person to die to be available for the use and benefit of the surviving party during the lifetime whilst ultimately preserving it for the deceased’s final beneficiaries. Most practitioners will recommend the use of a trust over mutual Wills as it will achieve the same aim but offer far greater flexibility.
If you would like advice around the different types of Will available and which one would be the best fit for you then please contact one of our experienced lawyers. Call us on 0116 212 1000 or alternatively fill in the free Contact Us form and we will get in touch as soon as possible.
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