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Mutual wills – the main principles, by Eugene Duhovnikoff BA/LLB

The recent decision in Lewis v Cotton[1] provides us with a comprehensive summary of the principles related to the doctrine of mutual wills. As a gross simplification these principles are illustrated by the following example:

X leaves property to Y upon an undertaking that Y, although no trust is mentioned in the will, is to hold it for Z or is to leave it for Z under Y’s will. Y then cannot take the property and repudiate the obligation to Z. If Y’s will in fact leaves the property elsewhere, Y’s trustees must hold the property for Z. Equity will not permit Y to commit a fraud on X and on Z by allowing Y to deal with the property contrary to the undertaking.

It makes little practical difference whether or not the wills are drawn as separate documents or a as a single document although a joint will would at the present day be such a rarity that its existence might point strongly towards a mutual intention that neither should revoke. A will-maker can always revoke his or her will even if non-revocation has been contractually promised, for a will is by its very nature and in its very essence a revocable instrument. But the consequence of the promise may be that the executors and trustees of any replacement will, if it becomes operative upon the death of the testator, will be required to hold the affected assets upon a constructive trust in terms of the revoked will.

Where “mutual wills” have been made the promise may be said to be either:

  1.  Not to revoke at any time whether secretly or openly ; or 
  2.  Not to revoke secretly during the other will-maker’s lifetime, thus depriving the other person of the ability to adjust his or her own will, and, secondly, not to revoke at all after the other’s death, which event of course makes the other’s promise truly irrevocable.

It is clear that revocation of the mutual will during the joint lives of the parties will determine the agreement and release the other party from his obligations under it, however in that case no effective remedy is likely to result to either party. An equitable enforcement consideration in the strict sense is unnecessary. It would in any event, if necessary, be provided by the mutual promises and the execution of the wills. It has been said that consideration continues to be given by each party while both wills remain unrevoked. The death executes the contract between the parties.

A promise not to revoke (or not to deal with property in an inconsistent manner) may be express or may be implicit from what the parties have said and done, including of course the terms of the two wills. However, there must be more than mere consultation and coordination between the testators and more than a mere agreement or arrangement between them that they will proceed to make their respective wills in a particular way.

What is required to bring into play the doctrine of mutual wills is proof of an agreement intended to bind the two testators to a future course of inaction – that the wills shall remain unaltered. A formal legal contract is not needed. A contract made without formality is enough. The Courts are very slow to find “mutual wills” just because the parties have made corresponding wills. The standard of proof for a party asserting the existence of mutual wills is the ordinary civil standard of proof on the balance of probabilities, but the claim must be scrutinised with very great care, as with all claims to the property of deceased persons.

Where the survivor is given the use of property under the mutual will, it may be implicit that the survivor, though bound to bequeath the property in terms of the mutual will, may be taken to have agreed only to pass on what he or she has not sold, expended or consumed, provided that he or she does not act so as deliberately to defeat the purposes of the arrangement. This has been described as a “floating obligation” which crystallises on the death of the survivor.

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[1] [2001] 2 NZLR 21.

 

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Reeves/Duhovnikoff & Associates Ltd. 2017

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