‘Mutual wills’ depend more on trust than law
By Alan Cooper
Published: July 19, 2011
Tags: Elder Law, Hanover County Circuit Court, Judge Timothy S. Fisher, Newport News Circuit Court, Supreme Court of Virginia NewsPublished: July 19, 2011
Second marriages and “first” children are generating more issues in estate-planning practice, as couples continue to divorce and remarry before they can celebrate that golden anniversary with one spouse.
One of those issues is making sure the children of each spouse get treated equitably when the last parent dies.
Mutual wills, sometimes accompanied by a contract to make a will, attempt to do that. Typically, each spouse leaves his or her estate to the survivor and each child gets an equal share when the surviving spouse dies.
The Supreme Court of Virginia has held that properly drafted mutual wills are enforceable. Black v. Edwards, VLW 094-6-082, and Williams v. Williams, 123 Va. 643 (1918) are the leading cases.
But J. Rodney Johnson, a retired law professor at the University of Richmond says there are no magic words to keep the surviving spouse from writing a new will and leaving everything to his or her children – or to anyone else.
And so many of Johnson’s former clients did just that, he “decided in my private practice that I wasn’t going to do them any more.”
The child who was cut out could go to court in an effort to win enforcement of the provisions of the mutual will and might well prevail, Johnson said.
But establishing that the wills were in fact mutual can be uncertain, daunting and expensive, Johnson said. Even cases with legal merit might not be worth pursuing in the absence of a substantial estate, especially if, as is often the case, assets already have been distributed from the estate.
John Midgett, a trust and estates specialist in Norfolk, agrees with Johnson. “It’s just an invitation to litigation. All you’re doing is throwing it on the heirs to fight it out over what Mommy and Daddy intended.”
Two recent cases, one decided in May by a Hanover County jury, and the other on appeal to the Supreme Court of Virginia from Newport News Circuit Court, illustrate the uncertainty in enforcing a mutual will even when the assets are substantial, more than $2 million in the Hanover case and about $1.7 million in the Newport News litigation.
In the Newport News case, Arvid Keith and Lucy Faye Keith each had a child from a previous marriage when they wed in 1972. They signed what the son argued were mutual wills in 1987. The lawyer who drafted the wills said he had no recollection of whether the wills were intended to be mutual.
Arvid died in March 1996, but not before telling his son to “watch out for Faye.” The son interpreted that as a warning to protect his share of what had been a joint estate rather than a request to see that his stepmother was taken care of.
Faye’s signature on a new will two month’s after Arvid’s death suggested the son’s interpretation was correct. The document left everything to Faye’s daughter and named her executor.
After Faye died in 2006, the daughter probated the 1996 will, and the son challenged it.
Judge Timothy S. Fisher ruled the wills themselves didn’t establish that they were intended to be mutual. There was little other than the uncorroborated testimony of the son about ambiguous statements that his father and stepmother had made to indicate the wills were mutual. The judge upheld the validity of the 1996 will.
The Supreme Court granted the son’s petition for appeal last month, Keith v. Lulofs, Record No. 110433.
The Hanover case differs from the Newport News litigation in that the 1995 mutual will – and a separate contract to make a will – designated the couple’s daughter as the beneficiary. After the mother died in 1997, the daughter moved out of state.
Around 2009, another relative – a distant cousin or great nephew of the mother – helped the father with some health concerns, and he signed the last in a series of revised wills leaving the bulk of estate to the relative and nothing to the daughter.
The daughter did not learn of the new will until the relative attempted to probate it after the father’s death in 2010. She still had a copy of the 1995 contract and will and filed suit arguing the documents required the estate to go to her.
A jury overturned the will after the presiding judge ruled the daughter’s remedy would be specific performance if she prevailed. Final resolution of the case, McDougle v. Bruggeman, is still pending in the trial court.
Johnson and Midgett said there is a way to avoid the problem created when spouses have agreed on who should inherit their estate and the survivor changes his or her mind after the death of the first spouse.
It involves setting up an irrevocable trust with an independent trustee to hold and distribute the assets, Johnson said.
But many clients are uncomfortable with such a legalistic concept, he said.
Trusting a spouse to do the right thing, even when warned that it may well be a matter of trust, not law, still may be preferable to the client, he said.
As always, please consult with a Virginia attorney about legal issues raised in this article. Every situation is unique.
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