Mutual Wills After Francis v Monk: Asset Exclusion and the Effective Limits of Family Protection Act Claims
- Introduction
The decision in Francis v Monk [2005] NZHC 3721 provides a useful application of the mutual wills doctrine in the context of the Family Protection Act 1955 (FPA). It confirms that, where a mutual wills agreement is established, the affected assets may not be available as part of the free estate of an FPA claim
The FPA usually allows the Court to make provision out of the estate of a deceased person where adequate provision has not been made for eligible claimants. However, the Court’s jurisdiction operates against the estate available for distribution. Assets already subject to binding equitable obligations arising from a mutual wills agreement may fall outside that pool.
Where such an agreement is proven, the practical availability of FPA relief may be significantly limited, even where the claimant is eligible to bring proceedings under the Act.
- Mutual Wills: Doctrine and Operation
A mutual wills agreement arises where two testators enter into a binding arrangement that:
- they will execute wills in a particular form; and
- they will not revoke or alter those wills after the death of the first testator.
Mutual wills should be distinguished from mirror wills. Mirror wills may contain identical or reciprocal terms, but they do not create a binding ‘mutual will’ obligation on the survivor without express terms.
Although each will remain formally revocable during lifetime, equity binds the survivor after the first death by imposing a constructive trust or equivalent obligation over the survivor’s estate to give effect to the agreed testamentary scheme. This means that if the survivor changes their will in breach of the mutual wills agreement, the beneficiary who then misses out as a result of that change can sue to recover any loss they have incurred.
The doctrine is founded on contractual principle but operates through equitable enforcement. Once engaged, it may alter the practical character of the affected property. The relevant assets cease to be freely disposable and become subject to a prior equitable obligation.
Accordingly, mutual wills may operate to exclude affected assets from the estate pool for an FPA award.
- Proof of Mutual Wills Agreements
A mutual wills agreement may be established by a range of evidential material. The doctrine does not require formal documentation within the wills themselves.
Recognised categories of evidence include:
- express clauses within wills recording the agreement;
- contemporaneous correspondence between testators;
- solicitor attendance notes and instructions;
- file memoranda and estate planning documentation;
- emails or written communications between the parties;
- oral statements evidencing a binding commitment; and
- contextual evidence demonstrating a reciprocal and binding arrangement.
The critical inquiry is whether the evidence establishes a binding obligation not to revoke or depart from an agreed testamentary scheme.
This evidential flexibility is particularly significant in estate litigation involving blended families, where informal estate planning communications are common.
- Francis v Monk
In Francis v Monk the mutual wills arrangement was evidenced by express testamentary provisions recording the parties’ agreement.
The defendants sought strike out of the plaintiffs’ FPA claim on the basis that the estate assets were subject to binding obligations and therefore unavailable for redistribution under the Act.
The Court applied established authority, holding that:
- the mutual wills agreement created enforceable obligations arising during the lifetime of the deceased;
- the relevant assets were not part of the free estate for FPA purposes; and
- the absence of available estate property meant no effective relief could be granted under the Act.
On that basis, the claim was struck out as untenable.
- Conclusion
Francis v Monk confirms that mutual wills can materially affect the availability of relief under the FPA. Where a binding mutual wills agreement is established, even otherwise eligible claimants may be unable to obtain relief if there are no unencumbered estate assets from which provision can be made.
