0 By Professor Lesley King, College of Law, London

Mutual will arrangements

Olins v Walters [2007] EWHC 3060 Ch is a short judgment but it contains many interesting points.

Harold Walters, aged 96 at the time of the litigation, was a successful businessman and undisputed patriarch of his family. He was married to Freda, and the couple had two daughters and a number of grandchildren. One of the grandchildren was Andrew, a successful solicitor, who advised his grandfather on all legal matters.

Mr and Mrs Walters had made wills in 1988 in similar terms, leaving residue to the surviving spouse conditional on them surviving for 30 days. In default, the residue was to be divided into three equal shares - one for each of the daughters and the other for the grandchildren.

In 1998 Mr and Mrs Walters asked Andrew to prepare enduring powers of attorney, appointing Andrew as their attorney. Because Andrew was being given power to act on behalf of his grandparents he decided to ask his brother Edward to attend with him, so that the other members of the family could be satisfied that Mr and Mrs Walters had not been pressured and that the powers of attorney represented their true wishes.

Andrew gave evidence that, at the meeting his grandparents, said they wished to ensure that their estates eventually passed to the grandchildren. They were concerned that their daughters might be persuaded to make lifetime gifts to others or leave the property away from the grandchildren. Mr Walters asked Andrew for advice and Andrew explained the concept of a life interest. Andrew also gave evidence that Mr Walters wished to protect the survivor of the couple coming under any pressure to change their will after the first of them died. Andrew then explained the concept of mutual wills.

After the meeting, Andrew prepared codicils which gave the daughters' life interests only and included the statement: 'This codicil is made pursuant to an agreement made between my [husband/wife] and me for the disposal of our property in a similar way by mutual testamentary dispositions'. The codicils were accompanied by a letter which explained clearly and fully the effect of that clause and the effect of life interests. Both Mr and Mrs Walters signed the codicils. Andrew dictated a full attendance note within an hour of the meeting, which dealt fully with the life interests but did not mention the mutual will arrangement. Edward (at Andrew's request) prepared a note of the meeting shortly afterwards. It did not deal with the mutual will arrangement.

After the death of Mrs Walters, her husband contended, among other things, that he and his wife had never made a contract not to revoke their wills, and denied that they had ever received the explanatory letter from Andrew. He also alleged that the codicil had not been properly executed because the deceased had never been together with the alleged witnesses. It was also alleged that the clause contained in the will was not binding as a mutual will arrangement. The judge rejected all these contentions. The following points are worth noting:

1. The deceased's estate included a substantial house, which had been the family home since 1948. Healey v Brown [2002] EWHC 1405 held that a mutual will agreement relating to the disposition of a specific property was not binding because it did not comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, which requires all the terms of a contract to dispose of land to be recorded in one document signed by both parties. Judge Norris held that section 2 was irrelevant on these facts because the deceased's will simply asked her executors to convert her estate and then disposed of the residue so realised. Section 2 is only relevant where the agreement is expressed to relate to land.

2. Although the witnesses professed that they had no recollection of ever witnessing a will for the deceased, the codicil contained a formal attestation clause. That raised presumption of regularity. A clear line of authority, from Wright v Rogers [1869] LR 1 P & D 678, 33 JP 711, 38 LJP & M 67 to the recent Court of Appeal decisions in Sherrington v Sherrington [2005] EWCA Civ 326, [2005] 3 FCR 538 and Channon v Perkins [2005] EWCA Civ 1808, establishes both the presumption and its strength. Where it appears from the face of a testamentary document that it has been properly executed in all respects, one needs 'the strongest evidence' to the effect that the will was not duly executed. Oral testimony as to the way in which a document was executed many years ago will rarely be sufficient.

3. Members of the family had been critical of Andrew's behaviour, suggesting that he had failed to give adequate advice regarding the onerous nature of a mutual wills agreement and that this failure was particularly serious because he took a benefit under the codicil which became irrevocable on his grandmother's death. Norris J rejected these allegations. Andrew had recorded in his attendance note that he had asked his grandfather to seek independent advice and had repeated this request in the letter accompanying the codicil. Norris J held that this was a proper discharge of his legal duty. It was significant that Andrew benefited no more than his siblings (and to a lesser extent than his cousins). He was simply a member of a class that his grandfather specifically wished to benefit. (The case is, however, a good illustration of the importance of ensuring that family members take independent advice in cases where there is any possibility of future argument.)

4. In mutual will cases difficult questions often arise as to the extent and nature of the trust that binds the property subject to the arrangement, and the extent to which the survivor is free to deal with property during his lifetime. Norris J said that the agreement normally affects the combined estates in the hands of the survivor, but that this depends ultimately on the terms of the contract between the parties. The claim form sought a declaration that Mr Walters held the deceased's estate (not the combined estates) on the trusts identified within the mirror codicils. Norris J, therefore, made no finding as to the scope of that agreement, which remained a question of construction of the agreement. The deceased's estate was clearly bound but the issue of Mr Walters' own estate was not before the court.

As always, mutual will arrangements present difficult issues.