Estate Planning Essentials - Joint wills, mutual wills, contracts to make a will – what are they and should I use one?
Although joint Wills and mutual Wills are commonly used as interchangeable expressions, the manner in which each document is drafted and the effect of each document differs significantly.
A joint Will is a single document executed by more than one person (typically husband and wife), which has effect in relation to each signatory's property on his or her death. While a joint Will is a single document, it provides for a separate distribution of property in respect of the estate of each signatory. Not all jurisdictions recognise joint Wills and some jurisdictions recognise joint Wills merely as a contract to make a Will. Joint Wills are often complicated and impractical and are not usually recommended as appropriate for most people.
A joint Will is fundamentally different from a mutual Will in that joint Wills are not intended to be binding or to convey a mutual intention; they merely facilitate the administration of two estates in one document.
A mutual Will entails one person making a Will in a particular form, that is reciprocated by the other person. The most common form of a mutual Will is between a husband and wife where they leave their entire estate to each other.
Contracts to make a Will
A person can dictate how their assets should be dealt with via a Will. A person can change their Will as often as they wish. It is the last valid Will prior to death that will be binding.
However, a person may agree to make and then maintain a Will in a certain manner in return for someone else making a Will in a certain manner. A Contract to make a Mutual Will is not a Will itself but is rather an agreement between (usually) two people that they make a Will in a certain manner on the condition that the other person makes a Will in a particular form. By doing so, a constructive trust is created.
As these Wills are formed by two people creating a constructive trust, any alteration of the Will requires the consent of the other person, of if after the death of one person, the legal personal representative of the deceased.
The term ‘mutual Will’ can sometimes (misleadingly) be used to describe a contract to make a Will. Technically speaking whilst a Will may be mutual, it is not automatically a contract to make a Will and can be changed at any time the maker wishes.
Contracts to make a Will are a popular option where the maker wishes to ensure (subject to a Court order or agreement to the contrary) that property will pass to children of a marriage rather than the a new partner of the surviving spouse (or the new partner’s children). Contracts to make a Will are binding on the individuals' executors and trustees. This ensures that following the death of one party, the surviving spouse cannot change their Will and alter the provisions of their Will.
The usual approach taken when drafting a contract to make mutual wills is to incorporate a provision in the contract which stipulates that the contract only applies to the joint estates at the time of the death of the first to die. In the event that a surviving party accrues other assets after the death of the first to die, a second Will can be drafted to deal only with those assets.
We recommend that if you are considering entering into a contract to make mutual Wills you obtain independent legal advice as to the nature and effect of such contract. As it is an area of the law that can be riddled with complexity, obtaining the right advice is essential.Back