Tuesday, December 27, 2005

Mutual Wills: Agreements Not To Revoke a Will

The law of British Columbia allows you to revoke your will as long as you have the mental capacity to do so. What if you make an agreement that you will not revoke your will? Is the agreement enforceable? What if you change your will anyway?

Let me give an example of how this question might arise. Let's take a couple in a second marriage. Each of the wife and the husband has children from a previous marriage. They make wills leaving all of their wealth to each other, but each also provides that if he or she is the last to die, one half of the estate will go to his or her children, and one half to the spouse’s children.

In this example, let’s assume that the wife dies first, and the husband inherits all of his wife’s wealth. He then changes his will, leaving everything to his children, and nothing to his wife’s children. Can the husband do this?

Yes. Although it may not be fair to his wife or her children, he is entitled to change his will.

However, what if when the couple made their wills they entered into a mutual wills agreement that they would not revoke their wills?

British Columbia courts have held that where two people expressly agree that they will not revoke their wills, and one of them dies without revoking his or her will, the agreement binds the surviving person. See, for example, University of Manitoba v. Sanderson Estate (1998), 155 D.L.R. (4th) 40; [1998] 7 W.W.R. 83; 47 B.C.L.R. (3d) 25 (BCCA).

In our example, if the couple made a mutual wills agreement that neither one would revoke his or her will, then the wife’s children could sue the husband’s estate and ask the court to require that one half of the estate be paid to them. Technically, the court does not prevent the husband from revoking his will—he has already done that—but imposes a constructive trust over one half of the husband’s estate for the wife’s children.

Before finding a mutual wills agreement, the courts require clear evidence that each party agreed that they would not revoke their wills, usually an express written agreement or statement in the wills. It is not enough to show that each was honor bound to keep the provisions of his or her will. In making a mutual will agreement each party is agreeing that he or she will abide by the agreement even if after the other’s death, he or she remarries, or has children.

In Brynelsen Estate v. Verdeck, 2002 BCCA 187, Mrs. Forrester’s two stepdaughters from her second marriage claimed that when their father and Mrs. Forrester had made wills in which they left everything to each other, with the survivor leaving everything to the two stepdaughters, Mrs. Forrester and their father agreed that on the death of one, the survivor would not revoke the gifts to the stepdaughters. After her second husband—the plaintiffs' father—died, Mrs. Forrester remarried. The remarriage revoked her will, and Mrs. Forrester (whose name had by then become Mrs. Brynelsen) died without a valid will.

In rejecting the stepdaughters’ claim, Madam Justice Southin, for the B.C. Court of Appeal, set out the following test:

[25] The critical time in this case is the time of the making of the wills when the Forresters had been married but a few months. The evidence simply does not warrant a conclusion that Mrs. Forrester, as she then was, was close to the respondents whom she had met but a few months before.
[26] Suppose, at the time of these 1973 wills, Mr. Forrester had been asked whether he was binding himself to leave not only what he might inherit from her but also his own estate to the respondents no matter what happened? Was he depriving himself, if he married yet again and had children by a third wife - it is not unheard of for a man in his sixties or seventies to marry a young wife and father children - of the means of providing for them? What of Mrs. Forrester if she had been asked, 'What if he dies and you marry again - are you committing yourself to leaving nothing to your next husband or his children, of whom you might become fond, or, to put it another way, to leave anything a third husband might leave to you or give to you to Mr. Forrester's daughters?'
[27] To my mind the answer each would have given to these questions is 'no'. For them to have given any other answer would have been irrational.

Even where it is clear that a couple intends to be bound by an agreement that they will not revoke their wills, there are several potential problems enforcing mutual will agreements. Let's return to our earlier example. The husband and wife have agreed that neither will revoke his or her will if the other dies first. The wife dies before the husband. Suppose that the husband does not revoke the will at all, but transfers his property into a joint tenancy with right of survivorship with his children, leaving little or nothing to pass under his will to his late wife's children? What if he gives all of his wealth away before he dies?

It is possible that a court would enforce the agreement if husband has transferred assets into a joint tenancy or given assets away. The court might impose a constructive trust on those assets. However, the outcome would be uncertain.

1 comment:

Shelly Slader said...

That would be such an awful situation if that really happened. It might be legal to change your will after a spouse dies, but I don't think it is fair. When you do something together, like make a mutual will, then I think both parties should stick to it.
Shelly Slader | http://www.afterhourslegal.com.au/wills-deceased-estates/