When it comes to estate planning, mutual wills are often cited as cautionary tales in the legal world. These unique devices involve a couple each entering into Wills with identical terms – and an agreement that neither party can change or alter their Will during their lifetime without the other’s consent. They are often made between married couples but do not have to be. After the first person’s death, the terms of the Will remain binding on the survivor, regardless of any new Will made later on.
The case of Naidoo v Barton [2023] EWHC 500 (Ch), is a rare and important decision that has recently emerged in the realm of Mutual Wills. In this case, the High Court intervened and overturned a surviving spouse’s Will on the basis of undue influence. This is significant because it demonstrates the legal authority behind the concept of Mutual Wills and highlights the potential pitfalls that can arise if they are not executed properly.
What are Mutual Wills?
The creation of a Mutual Will is something that normally occurs between married couples or those in civil partnerships. They are sometimes confused with Mirror Wills, which are actually completely different, meaning that any mix-up between the two is likely to have serious and potentially costly ramifications.
In simple terms, a Mutual Will is an agreement drawn up between two parties that states that neither will revoke or in any way amend their Will in the future without gaining consent from the other party involved or changing the Will (technically in breach of contract) and notifying the other party so they can also change their Will if they wish. Mirror Wills, on the other hand, are simply Wills that reflect the contents of each other, but each of which can be altered on an independent basis as and when the testator chooses.
Expecting a Mirror Will to apply in the long term calls for a large degree of trust between the parties concerned. The reality is that each individual could, if they wish, alter their Will so that it no longer mirrors the contents of the other, without being under any obligation to let the other party know what they have done.
If one partner marries again following the death of the other, for example, they will be free to create a new Will which supersedes anything previously written. This could see them leave any assets from what was a joint estate to a new spouse, rather than any children from their first marriage.
Alternatively, having written Mirror Wills, you may find yourself in the position of dealing with the estate of a deceased spouse or civil partner and discovering that a new Will they have written leaves their half of the estate to another party, rather than it automatically passing to you as their spouse or civil partner.
Mutual Wills, on the other hand, offer no such flexibility. Following the death of one of the parties to the Mutual Will, the other is legally prevented from making any change to the agreement. In this respect, the concept of a Mutual Will runs in complete opposition to the standard approach taken to Wills, in that normally, any party still equipped with the mental capacity to make a Will also has the freedom to amend or replace it as and when they choose.
A person’s life can change massively over time, through remarriage, or the birth of new children or grandchildren, for example. But Mutual Wills inhibit the ability to change an existing Will to better reflect shifting personal circumstances but do not prevent a person from legitimately spending what they have inherited, so undermining the purpose of a mutual Will. For that and other reasons, they are not generally advisable.
In some cases, an individual may opt to write a new Will anyway, having previously been party to a Mutual Will. But in such cases, any new beneficiaries arising from changes made to the original Mutual Will are deemed, in legal terms, to simply be holding the assets left to them on trust, prior to meeting the obligations set out in the original Mutual Wills.
These limitations, and the way in which a Mutual Will lacks the capacity to reflect the complexities of real life, mean that Mutual Wills are still a relatively rare undertaking. However, as the case of Naidoo v Barton [2023] EWHC 500 (Ch) shows, some individuals do still opt to create them, leaving themselves open to the underlining risks when they do.
Naidoo v Barton
Dr and Mrs Naidoo were the owners of a successful nursing home business which they ran with several other members of the family. In 1992, Dr and Mrs Naidoo, along with other members of the Naidoo family, were persuaded to transfer the entire share capital in the business to their second eldest son, David Barton. This involved Dr and Mrs Naidoo and two of their other sons resigning the directorships they held while David Barton took over as director, running the business for his own benefit.
In 1998, Dr and Mrs Naidoo drafted Mutual Wills in which they left their estates to each other and, on the death of the last surviving spouse, to David Barton, or his wife if he died before her. The Mutual Wills also named David Barton as the executor.
Dr Naidoo died in January 1999 and then in 2015, a few months prior to her own death, Mrs Naidoo made a new Will. This version of the Will appointed a different son, Charan Naidoo, as executor of the will and sole beneficiary.
Following the death of Mrs Naidoo, David Barton challenged the 2015 Will on the grounds that the existing Mutual Will could not be revoked following the death of Mr Naidoo.
Proceedings were issued in the High Court in which Charan Naidoo sought an order pronouncing the 2015 Will valid and for the 1998 Mutual Will to be rescinded on the grounds that it was written by mistake and under undue influence.
David Barton defended this claim, drawing largely upon the fact that the Mutual Wills had been drafted with help and advice from solicitors.
When analysing the conclusion that the Court ultimately came to, it’s useful to bear in mind that the evidence presented by David Barton was by video link, due to the fact that he was at the time serving a prison sentence for a range of offences including fraud perpetrated against the vulnerable residents of a care home in which he worked.
During the case, Charan Naidoo argued that Mrs Naidoo had believed she would be able to alter the Will written in 1998 following the death of her husband, in order to reflect any change in her intentions, and that therefore the 1998 Mutual Will was invalid on the grounds of it having been drafted mistakenly.
The court rejected this argument, finding that Mrs Naidoo had a clear understanding of the limitations imposed by the drafting of Mutual Wills. The other argument presented by Charan Naidoo was that the 1998 Will should be rescinded on the grounds of undue influence.
The case to which the court referred when determining whether undue influence had been used against Mr and Mrs Naidoo in order to force them to make Mutual Wills was that of Royal Bank of Scotland Plc v Etridge (No.2) [2002] 2 AC 773.
The principles set out in this particular case mean that undue influence is presumed to have been exerted on a party in circumstances in which the defendant has either applied coercion or improper pressure on that party or developed a relationship in which a measure of influence has been gained over the party in question and, having developed that relationship, uses it in order to take unfair advantage of the party.
Under common law, as it applies to undue influence, the evidential burden is such that undue influence through coercion or fraud needs to have been demonstrated, something which is extremely difficult to prove.
The lower evidential bar set in this case was such that the confidence Mrs Naidoo placed in her son’s advice was taken to be such that he was able to effectively instruct her to draft Mutual Wills on terms he set out. As such, the Court found that there was ‘no satisfactory explanation’ for the drafting of Mutual Wills, as the sole beneficiary following the death of Mrs Naidoo would be David Barton.
With this in mind, the Court established that the only reasonable explanation for the drafting of Mutual Wills was a degree of undue influence exerted and unfair advantage taken by David Barton. To reflect these findings, the Court ordered that the 1998 Will be rescinded and Mrs Naidoo’s estate admitted to probate on the basis of the 2015 will.
In this particular case, the Court’s pragmatic approach to the issue of undue influence resulted in a favourable outcome for the claimant. The Court determined that knowledge of the relationships that were central to the case and the character of the defendant negated the need for any type of concrete evidence, such as a record of the application of undue influence that was either written down or audible.
Had this not been the outcome, however, the case would have served as a stark reminder of the limitations placed on an individual by the drafting of Mutual Wills, and the time and expense that can arise when any attempt to escape the restrictions thus imposed.
It should be borne in mind that several cases have shown that Mutual Wills do not need to state explicitly that they are mutual in order for them to be judged as such in legal terms. This merely serves to underline the care which needs to be taken when drafting a Will, particularly if, as a married couple or civil partners, the parties in question create Wills that strongly reflect one another.
Should you require advice on how to best reflect your wishes, and protect the needs of your loved ones in a Will, please contact our expert advisors for an impartial, confidential consultation.
