While Mutual Wills are rare, they do still exist and with blended families become more and more common, they are not likely to disappear any time soon.
A Mutual Will Agreement is created between two individuals (usually spouses or domestic partners) when making their Wills which creates an agreement whereby they agree to not revoke or alter the terms of their Wills in the future without the consent of the other party.
Mutual Wills are often used to ensure that assets pass to the surviving partner or in blended families to ensure assets pass to children of the deceased.
In a case heard by the Supreme Court of Victoria earlier this year, the court needed to determine whether an oral agreement made between Kurt and Marilyn Miglic in 1993 was a Mutual Will Agreement.
Case Study: Re Miglic [2024] VSC 20
Background facts
- Kurt and Marilyn Miglic were married for over 30 years before Kurt’s death in 2007
- Kurt had two children from a prior marriage (Lisa and Andrea) while Marilyn had no children
- In 1993, Kurt and Marilyn made new Wills that had some minor differences between them however, the effect of the Wills was to gift their entire estates to each other or, on the death of both of them, to Kurt’s children
- After Kurt’s death, his entire estate went to Marilyn under his 1993 Will
- Marilyn made several new Wills from in 2001 and 2005 during the time in which Kurt was suffering from dementia;
- She made further Wills after his death in 2011, 2014 and 2018;
- Marilyn died in 2020 and by her last Will:
- gifted a property 1/5th each to Lisa, Andrea, Stephen, Victoria and Louise (sold for $11.5million) being the major asset of the estate; and
- apart from other minor gifts, left the balance between Andrea, Victoria and Louise
- Lisa and Andrea brought proceedings against Marilyn’s estate claiming that Kurt and Marilyn made a Mutual Will Agreement in 1993
The arguments made
As there was no written record or documents proving the existence of a Mutual Will Agreement, the court was provided arguments from both sides.
There was a Mutual Will Agreement
- Lisa and Andrea provided evidence of regarding a number of conversations where Kurt had advised them of the agreement between him and Marilyn that eventually after both of their deaths, they would receive all assets. They also stated that Marilyn was a party to some of these conversations.
- Lisa and Andrea also filed material from their mother and Andrea’s ex-husband about similar conversations that they had with Kurt regarding the 1993 Will.
There was no Mutual Will Agreement
- Stephen, Victoria and Louise provided evidence from Kurt and Marilyn’s lawyer in relation to their being no mention to him at the time in 1993 of any agreement that they would not later change their Wills.
- They argued that the evidence material provided by Lisa and Andrea was unreliable.
- It was also put to the court that Stephen, Victoria and Louise were at a disadvantage as they could not provide direct evidence on the discussions between Kurt, Marilyn, Lisa and Andrea as they were not part of the immediate family or part of the discussions.
The Court decision
The issue to be decided by the Court was whether there was a Mutual Will Agreement and if Marilyn was legally bound by the oral agreement to never change her Will made in 1993.
The Court found that there was an oral Mutual Will Agreement created between Kurt and Marilyn in their 1993 Wills. The outcome being that while Marilyn’s last Will made in 2018 remains valid, her estate is subject to a trust that reflects the terms of the 1993 Will. Therefore, Lisa and Andrea benefit from the majority of the estate.
In coming to this decision, the Court considered:
- The relationship between Kurt and Marilyn, including their ages and the length of their marriage;
- Marilyn did not have children of her own;
- Kurt was the primary source of income for the couple during the start of the relationship;
- The conversations between Kurt, Marilyn and Lisa and Andrea where they made relevant representations to them about their Wills;
- The circumstances in relation to the drafting of the subsequent Wills by Marilyn; and
- Representations made by Marilyn to Lisa and Andrea following Kurt’s death.
The Court, in its findings noted that:
- A key issue in the matter was whether it was only Kurt’s expectation that Marilyn would not change her Will;
- A couple making Wills at the same time, with the same terms and beneficiaries, does not create a Mutual Wills Agreement alone;
- Caution must be needed by Courts when accepting evidence of verbal agreements as people’s memories can become unreliable; and
- The standard of proof remains the ‘balance of probabilities’ meaning that Lisa and Andrea had to show, that it was more likely than not that Kurt and Marilyn entered into a Mutual Will Agreement.
Key takeaways
Mutual Wills can be complex and require careful consideration. This case highlights the difficulties that can be had in proving the existence of an oral agreement. Any such agreement needs to be documented with written evidence and with the willmakers showing a clear understanding of their responsibility under the agreement to not change their Will without the consent of the other.
How Nevett Ford can help?
At Nevett Ford, our Wills and Estates Team understands that each situation, each persona any every family is different. This means that Mutual Wills may not be ideal for every blended family or couple. We get to know out clients and work with you to build a Wills and estate plan that best suits your needs and wishes.
For more information, please contact us at melbourne@nevettford.com.au or on +61 39614 7111.