Mirror Wills – when they go wrong and Prevention.
Preventing this sort of situation is different for every set of clients, so please don’t take this as a definitive recommendation, just a useful starting place.
Let me tell you a story, which may or may not be true, but it really could happen to anyone:
Your life partner dies. Or you get divorced. You are lonely. Your kids have their own lives, you need company.
Over time, companionship becomes cohabitation, maybe even marriage for the second or third time.
There may already be children from more than one relationship, but your well-written Will covers that. The children are, by and large, pleased that you have re-found some happiness.
Marriage cancels old Wills (unless they were made with that marriage specifically in mind) and the Rules of Intestacy give your new spouse most or all of your estate automatically. Even living together will create rights for the partner soon enough.
So you make a Will to ensure that your partner is looked after, and both partners agree to share everything fairly between all the children when the second dies. But in the absence of (wildly inflexible and often toxic) Mutual Wills, the relationship between the survivor of the couple and the deceased children fades out or even becomes difficult in my experience (often due to the influence of the spouses of the survivors’ children). So the Will is re-written leaving everything to their own children.
Result: Sideways Disinheritance from Marriage After Death.
There is always the possibility of going to Court, why not use the contested probate checker. Cases which actually go to Court risk costs well in excess of £100,000, often doubled if you lose, so it makes more sense to get the situation sorted before it happens and maintain fairness and relationships. 01323 766766
How to prevent this happening? I will discuss Mutual Wills elsewhere, but let’s discount them as the nuclear option.
The simplest option is the Protective Property Trust
(Different versions for married and unmarried couples) where the survivor is left part of the assets in trust but with a life interest. That means usually the right to reside in the deceased partners share of the property or the right to the interest on investments. But those assets will eventually go on to the original beneficiaries – the children of the first to die. Some assets will pass automatically to the survivor depending on how they are owned, so it is unlikely (without much ongoing care) that the split will be exact, but it is a sensible compromise, which also has asset protection potential which could benefit the children of the first to die.
A more Comprehensive Option – Full Lifetime Trusts
Here the assets are transferred into a pair of Trusts as soon as the relationship takes on the air of permanence (and there is no harm in looking at it in a normal first marriage).
Again, the parties can have the right to benefit from their own Trust and a life interest in their partners, but the split has been done early on whilst both parties are willing and able to look at things objectively.
What is a Mutual Will? They sound perfect…
Mutual Wills are Wills which are made by two people (usually, but not always, spouses or civil partners), typically in the same terms, with the agreement that neither party will alter or revoke either Will during lifetime without the other’s consent, or at all after one has died. So whatever the circumstances, the survivor cannot change their Will in any way.
What is the difference between Mutual Wills and Mirror Wills?
Mutual wills are unlike mirror wills, which are made when two people make wills with the same terms but they can be changed in the future. If the Wills are to be regarded as Mutual, that must be made very clear so as to distinguish them from normal mirror Wills.
If the survivor does change it after the first death, then the executors of their new Will would hold the deceased’s estate on a constructive trust for the beneficiaries of the mutual will.
Disadvantages of Mutual Wills?
The lack of flexibility as circumstances can and do change, more and more difficult the longer the gap between the deaths. The testamentary freedom of the survivor is seriously restricted. Changes in the family or finances may cause issues, lifetime planning with gifts or finding more favourable legal or tax circumstances is pretty much out of the window.
There can be uncertainty and disputes can arise particularly over whether wills are mutual, especially as the agreement required can be contained outside of the will itself and does not necessarily need to be in writing. Not making it crystal clear in the Mutual Wills that they ARE Mutual Wills seems like a ploy to encourage disputes to me, though doubtless some would disagree. There will be difficulties over what is covered by the constructive trust, and how any subsequent changes such as inheritances should be treated.
My opinion? Avoid Mutual Wills if at all possible.
See also my article on Blended Families.
