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Oct 2018

Mirror Wills vs. Mutual Wills: Differences and Considerations

Spouses often choose to draft Wills with reciprocal terms that leave their respective Estates to each other, and then if one of them predeceases the other, to their children or other beneficiaries.  These are commonly referred to as “mirror Wills”, which either spouse can typically revoke at any point of time—for example, after the death of the other spouse.

Given the unilateral revocability of mirror Wills, some couples—particularly those in blended families with children from previous relationships—choose to make “mutual Wills.”  Mutual Wills differ from mirror Wills in that they involve a legally binding agreement vis-à-vis the manner in which the assets will be distributed upon death, such that the Wills cannot be revoked or changed by the surviving spouse after the death of the first spouse.  The legal consequence of breaching such an agreement is, generally speaking, the imposition by the Court of a constructive trust on the surviving party’s Estate in order to protect the interests of those who were intended to benefit under the agreement.  For example, where there is a binding mutual Will agreement which leaves everything to each other on the first death, and then on the second death, divides the remainder among the children from both sides, and the surviving spouse later signs a new Will leaving everything to his or her own children, then the children of the predeceased spouse would likely have a claim for breach of contract against the surviving spouse.

In order for the Court to find that a mutual Will agreement existed, Justice Cullity stated in the leading Ontario case of Edell v. Sitzer, (2001) 55 OR (3d) 198 (Ont SCJ) that such an agreement must:

  1. satisfy the requirements for a binding contract and not be just some loose understanding or sense of moral obligation;
  2. be proven by clear and satisfactory evidence; and
  3. include an agreement not to revoke the Wills.

Wills which are not specifically identified as being mutual may still amount to mutual Wills on the basis of extrinsic evidence.  In the recent case of Rammage v. Estate of Roussel, 2016 ONSC 1857, the Court found a binding verbal mutual Will agreement based on the evidence of a long-term supportive relationship between the spouses and the particular blended family history, which demonstrated that the spouses wanted to provide for each other and for their respective children with some certainty.  Nevertheless, it is important to ensure that there is a clear and express written agreement with precise terms and details in order to avoid any ambiguity which may lead to lengthy and costly litigation among the beneficiaries.

Mutual Wills, however, are not without weaknesses and, if not carefully considered and drafted, can result in adverse consequences due to unanticipated circumstantial changes down the road.  For example, if the surviving party remarries after the other party’s death, it would automatically revoke his or her Will (since marriage revokes a Will in Ontario).  While the mutual Will agreement itself may still stand, the surviving party’s new spouse would be able to pursue a claim with respect to his or her legal entitlements as a spouse against the surviving party’s Estate, thereby jeopardizing the estate distribution scheme contemplated under the agreement.  In order to prevent such an outcome, the surviving spouse would need to enter into a marriage contract prior to remarriage and make a new Will that ensures that the distribution as per the mutual Will agreement is maintained and continued.  Moreover, because mutual Wills essentially lock in the parties’ estate distribution schemes, the parties may experience inconveniences, if not problems, whenever circumstances change and they have to alter either or both Wills.  Depending on situations, alternative methods of estate planning, such as a family or spousal trust, may be considered in lieu of mutual Wills for flexibility and/or protection from new spouses and other creditors.

Accordingly, if you are considering mutual Wills, it is imperative that you thoroughly consider, and discuss with your lawyer, your situation and intentions, the ramifications and implications of making mutual Wills and the availability and suitability of any alternative tools in order to ensure that your wishes are effectively carried out.