SECRET TRUSTS AND MUTUAL WILLS

PART ONE SECRET TRUSTS

Introduction to secret trusts
Fully secret and half secret trusts occur where the testator of a will does not reveal the
identity of the true beneficiary.
It should be noted that for a secret trust to come into existence and be valid there must
be a valid will. In order to have a valid will there must be compliance with s.9 Wills Act
1837.
Section 9 of the Wills Act 1837 (as amended) provides that no will shall be valid unless:
(a) it is in writing, and signed by the testator, or by some other person in his
presence and by his direction; and
(b) it appears that the testator intended by his signature to give effect to the will; and
(c) the signature is made or acknowledged by the testator in the presence of two or
more witnesses present at the same time; and
(d) each witness either
(i) attests and signs the will; or
(ii) acknowledges his signature, in the presence of the testator (but not
necessarily in the presence of the other witness), but no form of
attestation shall be necessary.
Where the formalities are not complied with the testator will die intestate, in which case
the rules under the Administration of Estates Act 1925 will be used to distribute the
property of the deceased.
The law on secret trusts allows testamentary trusts to be enforced over property which
the strict formalities of trusts have been ignored.

Types of secret trusts

Secret trusts arising on intestacy
The secret trust principles extend to intestacies. These are occasions where the settlor
decides not to make a will on the faith of a promise by his next of kin to dispose of the
property in accordance with the settlors wishes as disclosed to him during the lifetime of
the settlor.
Sellack v Harris [1708] (Fathers heir agreed to be trustee and care for mother after
fathers death. Based on this agreement father did not create a will and the property
passed under intestacy. The heir held the property under trust beneficially for mother):
Demonstrates example of secret trust under intestacy

Secret trusts arising on transfer by survivorship in joint tenancy

Healey v Brown [2002] EWHC Ch 1405 (Husband succeeded as joint tenant on the
death of wife. Promised to leave flat to a named beneficiary on his own death.):
Demonstrates secret trust arising through receipt of land by survivorship in joint tenancy.

Fully secret trusts / Half Secret trusts arising on death of testator

A fully secret trust occurs when a testator appears to leave in his will an absolute gift
to a beneficiary but due to a communication with that beneficiary before his death has

stated that the beneficiary is to hold the gift on trust for a third party. The will does not
reveal the identity of the true beneficiary nor the existence of the trust.
A half secret trust is when a gift is left in a will to a trustee, however, the holder of the
beneficial interest is not stated in the will. So here the will reveals there is a third party
beneficiary but not who it is.
Rawstron v Freud [2014] EWHC 2577 (Ch): Distinguishes between a half-secret
trust and a fully secret trust. It was held that a secret trust is where both the terms
and the very existence of the trust are hidden. A half secret trust is where only the terms
were hidden, but not the fact of the trust.
Suggested that you use the ordinary meaning of the words in the will and look whether
on the face of the will there was a trust. Additionally it confirmed that if there is
ambiguity on the face of the will, then extrinsic evidence may be brought in. Rawstron
v Freud
However if there is an ambiguity on the face of the will, then the Administration of justice
act 1982 section 21 allows the court to hear extrinsic evidence.

FULLY SECRET TRUST

Three stage test for establishing a fully secret trust
Ottaway v Norman [1972] Ch. 698 (Testator, Ottaway, left house to Hodges. Hodges
left house to Norman. William, Ottaways son, alleged that Hodges held house under
secret trust for him. Court decided that there was clear evidence of fully secret trust):
Brightman J set out three requirements which must be satisfied for there to be a fully
secret trust:
1. An intention to create a trust benefiting the beneficiary;
2. Communication of that intention to the secret trustee;
3. The secret trustee must accept the trust either expressly or by acquiescence.

1. Intention to create a trust benefiting the beneficiary

Ottaway v Norman: Intention to create a secret trust requires proving an intention to
impose a trust obligation on the trustee.
Re Snowden [1979] Ch 528 (Elderly testatrix left estate to brother saying he would
know what to do.): An intention to impose a moral obligation is insufficient.
McCormick v Grogan (1869) LR 4 HL 82 (Testator told Grogan that he would find a
letter with his will containing instructions concerning his property. The letter named
certain people and amounts that each was to inherit but it also said that the trustee was
to act solely according to his own discretion. HoL held that there was no trust in this case
because it left the decision whether to act or not to the trustee.): Discretionary power
(discretion whether or not to act) does not indicate an intention to create a trust.
Rawstron v Freud [2014] EWHC 2577 (Ch) WHAT IS THE SIGNIFICANCE?

2. Communication of intention to secret trust

Ottaway v Norman: Creation of a valid secret trust requires communication of
intention to the trustee, that he is to receive property as trustee.
There are three criteria that needed to be met with regards to communication:

1. Communication of both the fact of the trust and the terms of the trust
2. Communication must be made before the death of the testator
3. Communication of the extent of the trust
NOTE THAT WHEN TRANSFERRING LAND UNDER A SECRET TRUST OTTAWAY V
NORMAN NEVER CONSIDERED THE FACT THAT THE PROMISE WAS NOT IN WRITING
CONSIDER WHETHER THE LACK OF EVIDENCE IN WRITING OF AN EXPRESS TRUST
AFFECTS THE TRUST

Communication of both the fact of the trust and the terms of the trust
Re Boyes (1884) 26 Ch D 531 (Testator, informed trustee of trust but not of the terms.
After death, letter directing trustee to hold property for testators mistress and an
illegitimate child was discovered. Court held that no trust arose because the trustee was
not told about the terms of the trust before the death of the testator and thus the trustee
held the property on a resulting trust.): (1) Communication of both fact of the trust and
the terms of the trust must be made before the death of the testator. (2) Where terms
have not been communicated during life of testator, however the trustee had agreed to
hold the property on trust, he will hold it under a resulting trust for the testators
estate to prevent his own unjustified benefit.
Re Keen [1937] Ch 236: Communication of terms of trust by means of sealed envelope,
given to trustee during testators lifetime, which is opened after testators death, will be
sufficient to create a trust, provided trustee knew that content of envelope was
connected with the trust. Lord Wright considered this to be similar to a ship sailing under
sealed orders.

Communication must be made before the death of the testator

Wallgrave v Tebbs (1855) 2 K & J 313: Communication must be made before death of
testator, thus documents found after death are not sufficient.

Communication of the extent of the trust

Re Cooper [1939] Ch 811 (Testator communicated to trustees that he was leaving
5,000 to them. He subsequently added a codicil to his will, increasing the amount of
the gift to 10,000, but without communicating this change to the trustees. Court held
that only 5,000 was subject to the secret trust.): Only property communicated to be
within the scope of the trust will be held subject to the secret trust.

Communication to joint trustees

Re Stead [1900] 1 Ch 237 (Stead left property to Witham and Andrews as tenants in
common. Witham was informed of terms, however Andrews was not. It was held that
Andrews took the share of property free from any trust.): Farwell J held (1) Where
trustees take as tenants in common, a secret trust will only bind the respective shares
of those to whom the testator had communicated the terms of the trust. (2) Where
trustees take as joint tenants, a secret trust will bind all trustees if terms are
communicated to any one of the joint tenants before or at the time of execution of the
will. However, if terms are communicated after executing the will, a secret trust will only
bind those to whom the terms have been communicated.
Perrins Can You Keep Half a Secret? [1972] 88 LQR 225: Suggested that Farwell J in
Re Stead had developed his reasoning from a misunderstanding of earlier cases cited as
authority.

3. Acceptance of the terms of the trust

Ottaway v Norman: The third essential element for the creation of a fully secret trust is
the acceptance of that obligation by the trustee either expressly or by acquiescence.

Walgrave v Tebbs: Wood VC stated that acceptance can either be by express promises,
or implied by silence.
Moss v Cooper (1861) 1 John & H 352 Pearce 498 (One of the three trustees remained
silent when the terms of the trust were communicated to the trustees. This was held to
be acceptance.): (1) Acceptance can be made by silence. (2) To refuse trust obligation,
the testator must be notified during their lifetime.

HALF SECRET TRUSTS

A half secret trust is a secret trust where the testator makes it clear on the face of the
will that the beneficiary is not to benefit personally from the gift under the will but to hold
the property as a secret trustee. The creation of a valid half secret trust is dependent
upon satisfaction of the same three elements of (1) intention, (2) communication and
(3) acceptance as for fully secret trusts. However the requirements for communication
are different. In a half secret trust the timing of the communication must be before or at
the same time as the execution of the will. Where the communication is after the
execution of the will the property cannot be claimed by the trustee and the trust is not
enforceable, so the property will result back to the testators estate.
Blackwell v Blackwell [1929] AC 318 (Testator, left 12,000 to five people to hold on
trust for his mistress and illegitimate son. Before the execution of the codicil, the terms
of the trust were communication and accepted.): Lord Sumner stated the essential
criteria for a half-secret trust are intention, communication and acquiescence.
Re Rees [1950] Ch 204: Under a half secret trust evidence is not admissible to prove
that a trustee was entitled to even a part of the property beneficially. If the testator
wishes to benefit the trustee he is required to express his intention in a separate
disposition under the will.

Communication must be made before the execution of the will

Blackwell v Blackwell [1929] AC 318: Lord Sumner stated that communication must
be made to the intended trustee before the will is executed.
Re Keen [1937] Ch 236: Accepted Lord Sumners statement in Blackwell v Blackwell
that communication must be made to the intended trustee before the will is executed.
Robert Pearce in Trusts and Equitable Obligations suggests that there is no reason
for maintaining a distinction between the rules of communication for fully and half-secret
trusts.
Re Kings Estate [1888] 21 LR Ir 273 OR Re Browne [1944] 1rR 90 OR Re Prendeville
[1990]: The courts in Ireland suggest that a valid half-secret trust can be created by
communication after the date of the will but before the testators death.
Gold v Hill [1999] 1 FLR 54 (Discusses whether the distinction between fully half-secret
trusts and fully secret trusts is justifiable) (Man who separated from wife nominated
solicitor as beneficiary of a life insurance policy, having communicated to solicitor that
the proceeds were to be held on trust for his partner and her children. Nomination and
communication had taken place after the execution of the will, which had left the estate
to the wife.) CLARIFY PRINCIPLE FROM THIS CASE
Rawstron v Freud [2014] EWHC 2577 (Ch) Seems to be important case WHAT IS THE
SIGNIFICANCE?

Communication must be consistent with Will

Re Keen [1937] Ch 236 (Terms of trust were communicated to the trustee before the
execution of the will, by means of a sealed envelope. However, this was insufficient
because the will stated communication would only be made after the will had been
executed.): Communication must be consistent with that described on the face of the
will. i.e. if it says communication will be to all trustees then it will not be sufficient unless
it is made to all trustees.
Re Spence [1949] WN 237 (Testator communicated trust to some of the four trustees. It
was held that communication was not consistent with the will, which stated that
communication had been made to them all.): Where communication is inconsistent with
that described in the will it will not be sufficient.
Robert Pearce in Trusts and Equitable Obligations questions the validity of such a
restriction. He suggests that the inconsistency between the communication and that
provided for in the will should only be material where it casts significant doubt upon
whether the testator had intended the communication to be an effective expression of
his wishes.

BURDEN OF PROOF
In the case of Wallgrave v Tebbs WHAT IS THE SIGNIFICANCE?

STANDARD OF PROOF historically required establishing fraud

McCormick v Grogan (1869) LR 4 HL 82: Lord Westbury held that an extremely high
burden of proof must be discharged before the court would impose a secret trust. It
was suggested that the standard of proof required a fraud to be proved by the clearest
and most indisputable evidence. OLD LAW
Ottaway v Norman [1972] Ch 698: Brightman J suggested that standard of proof
required was analogous to that required before the court would rectify a written
instrument. This was higher than the usual civil law standard of proof on the balance of
probabilities.
Re Snowden [1979] Ch 528: Until Re Snowden it was assumed that the standard of
proof was that applicable to fraud cases, however Re Snowden lowered the required
standard of proof. Megarry VC held that the standard of proof required to establish a
secret trust was simply the ordinary standard of evidence required to establish a trust. IS THIS THE THREE CERTAINTIES?

FAILURE OF SECRET TRUSTS

1.

Failure of a fully Secret Trust: Intended secret trustee will be entitled to take
the property for himself absolutely (Wallgrave v Tebbs) unless he admits that he
was intended to receive the property as a trustee, in which case he will be holding
on resulting trust for the testators estate (Re Boyes).

2.

Failure of a half Secret Trust: Intended trustee will hold property on resulting
trust for testators estate (Re Cooper [1939] Ch 811).

DEATH OR DISCLAIMER OF THE SECRET TRUSTEE

It is important to note that a secret trust does not come into existence until the death of
the testator.

1.

Secret Trustee predeceases the testator

i) Fully Secret trust where trustee dies before the testator the trust will fail
because the trust is not fully constituted until the testator has died.
Re Maddock [1902] 2 Ch 220: Cozens-Hardy LJ If the secret trustee renounces and
disclaims, or dies in the lifetime of the testator, then the trust will fail, because the
property has not passed to the secret trustee.

ii) Half Secret Trust where trustee predeceases testator, equity will not allow the
trust to fail for want of a trustee
Mallott v Wilson [1903] 2 ch 494: Provided it is possible to identify the terms of the
half-secret trust, the trust will not fail, rather the testators personal representative will
act as trustee in his place.

2.

Secret trustee dies after the testator

Trust will have been constituted; therefore it will not fail for want of a trustee. However,
if the death of the secret trustee makes it impossible to identify the beneficiary of the
trust, the property will pass by resulting trust back to the testators estate.

3.

Secret Trustee disclaims the trust

i)

ii)

4.

Disclaims or revokes before the death of the testator: In a fully

secret trust, where a trustee disclaims or revokes trust before death of
testator, the trustee will be entitled to take the property absolutely. However,
under a half secret trust, the property will be held under a resulting trust for
the testators estate. It is important to note that an effective communication
of revocation must be made otherwise trustee will be estopped from asserting
his revocation.
Disclaims after the death of the testator: A secret trust will not fail if
the trustee disclaims the trust subsequent to the testators death (Blackwell
v Blackwell).

Secret Beneficiary predeceases the testator

It is suggested that if the beneficiary dies before the testator, then the gift will lapse
because the trust is not fully constituted (until the testator dies). Re Gardner (No 2)
was heavily criticized for allowing the trust to survive in favour of the beneficiaries
estate. In effect the court had allowed an unconstituted trust to be enforceable.
Where a secret beneficiary dies and then the testator dies and property is transferred to
the trustee, it is suggested that the trustee will hold the property under a resulting trust
for the testators estate. IS THIS ONLY THE CASE UNDER A HALF-SECRET TRUST?
UNDER A FULLY SECRET TRUST WOULD THE GIFT NOT PASS TO THE INTENDED
TRUSTEE ABSOLUTELY?

SECRET TRUSTEE BENEFITING FROM SECRET TRUST:

Irvine v Sullivan [1869] LR 8 Eq 673: Held that the trustee of a fully secret trust was
entitled to retain the surplus of the trust property remaining after the trusts had been
carried out.

Re Rees [1950] Ch 204: Held trustee of a half-secret trust was not entitled to claim a
surplus because this would be inconsistent with the terms of the will, which suggested
that all the property is bequeathed subject to a trust.
Re Tylers Fund Trusts [1967] 1 WLR 1269: Suggests that there is no logical
justification for maintaining differentiation between fully secret and half-secret trusts and
doubts Re Rees.

Secret Beneficiary acts as Witness to the Will of the

Testator
A witness to a will cannot claim any benefit under that will according to section 15 of the
Wills Act 1837 (neither can a spouse of the witness).
Re Young (Deceased) [1951] Ch 344: A gift made to a witness under a secret trust is
enforceable and the requirements of the Wills Act are not compromised because a secret
trust operates outside the will.

JUSTIFICATION FOR THE EXISTANCE OF SECRET TRUSTS

Enforcing secret trusts seems to contradict the clear policy of the Wills Act since such
enforcement appears to permit a testamentary disposition without satisfaction of the
requisite formalities. Historically equity has enforced secret trusts on the grounds that to
fail to do so would allow the Wills Act to be used as an instrument of fraud.

Fraud Theory
The main reason why secret trusts have been upheld is to prevent fraud. The fraud
arises where a secret trustee has induced a testator to leave property to him on the
understanding that it would be held for a secret beneficiary. Historically such promises
have been enforced, despite being in contravention of the formalities required in the
Wills Act, because equity will not allow the statute to be used as an instrument of fraud
(Rochefoucauld v Boustead [1897] 1 Ch 196).
A similar view was stated by Lord Hardwicke in Drakeford v Wilkes [1747] 2 Atk 539:
[I]f a testatrix has a conversation with a legatee, and the legatee promises that, in
consideration of the disposition in favour of her, she will do an act in favour of a third
person, and the testator lets the will stand, it is very proper that the person who
undertook to do the act should perform, because, as I must take it, if (the secret trustee)
has not so promised, the testatrix would have altered her will.
McCormick v. Grogan (1869) LR 4 HL 82: Held that to prevent such fraud, equity would
allow admission of parol evidence on behalf of the beneficiary to prove that the bequest
had been subject to a trust.
Hodge, Secret Trusts: The Fraud Theory Revisited [1980] Conv 341: Despite
early acceptance of the fraud explanation by the House of Lords, it subsequently was
found to be an inadequate justification for the enforcement of secret trusts.

Defects with the fraud theory:

1. Fraud theory accepts that the enforcement of secret trusts is in direct conflict with
the provisions and policy of the Wills Act. Although such conflicts have been
tolerated in other areas, as was seen in Rochefoucauld v Boustead, the courts

today are reluctant to adopt an analysis so directly opposed to statute (Robert

Pearce in Trusts and Equitable Obligations).
2. Defect of fraud theory is that it does not provide an adequate justification for the
enforcement of half-secret trusts (in half secret trusts, the trust is evident on the
face of the will, so there is no possibility of fraud). In half-secret trusts fraud is
easily avoided because the trustee can hold the property on resulting trust for the
testators estate. CLARIFY THIS POINT
3. Fraud theory does not explain why a fully secret trust is enforced in favour of the
secret beneficiary. It justifies the refusal to allow the secret trustee from keeping
the property absolutely, however it is less clear why it enforces the trust in favour
of a secret beneficiary. The trustee could easily be required to hold the property on
resulting trust for the testators estate, in which case the trustee would be
prevented from benefiting and the provisions of the Wills Act would not be
contravened.
4. Adoption of the fraud theory had the effect that a high burden of proof needed to
be discharged if a beneficiary was to establish that property was held on secret
trust.
Robert Pearce in Trusts and Equitable Obligations suggests that based on the
aforementioned inadequacies, the fraud theory has been rejected in modern cases.
Despite these defects and much criticism, the fraud theory continues to have the support
of many academics.
See Page 505 Robert Pearce in Trusts and Equitable Obligations See Critchleys
argument

Alternatives to the fraud theory

i)

Modern View

Lord Westbury in Cullen v AG for Ireland [1866] LR 1 HL 190 (HL) suggested that
secrets trusts operate dehors (outside the scope of) the will. House of Lords in
Blackwell v Blackwell [1929] utilized Lord Westburys suggestion to justify the
enforceability of half-secret trusts. In Blackwell the House of Lords held that secret trusts
are enforced as valid inter vivos trusts arising outside the will. The House of Lords
suggested that the advantage of such an explanation is that it does not cause a conflict
between the enforcement of secret trusts and the requirements of the wills Act 1837,
section 9.
Re Snowden [1979]: Megarry VC summarized the modern justification of enforcement of
secret trusts; the whole basis of secret trustsis that they operate outside the will,
changing nothing that is written in it, and allowing it to operate according to its tenor, but
then fastening a trust on to the property in the hands of the recipient.
Robert Pearce in Trusts and Equitable Obligations: Suggests that the essence of
this modern view is that secret trusts come into existence entirely outside the will,
therefore the equitable interest enjoyed by the secret beneficiary is not a species of
testamentary disposition. He went on to explain that effectively the modern view
operates in two stages: (1) Testator communicates intention to secret trustee to subject
property to trust, at which point trust obligation is accepted. However at this point the
trust has not yet come into existence because the property remains the testators
absolutely. (2) Only when the testator dies and the will operates according to its terms
and the property is transferred to the secret trustee will the trust be fully constituted and
come into effect. Critchley in Instruments of Fraud, Testamentary Dispositions,
and the Doctrine of Secret Trusts, however, argues that this analysis is implausible,
largely because it is impossible to declare an immediate trust over future property or to
declare a trust so as to automatically bind property as and when it is received. It is

submitted that despite such criticism, the modern view, does not give rise to conflict
between enforcing secret trusts and the provisions of the Wills Act, because the trust is
not enforced under the will, rather it is enforced as a result of the previous agreement.
Re Young (Demonstrated the practical operation of the modern theory for the
enforcement of secret trusts) [1951] Ch 344 (Testator left entire estate to wife. Before
the will had been executed wife accepted instruction from husband that chauffeur, Mr
Cobb was to receive 2,000 out of her gift. The chauffeur had witnessed the will. The
question for the court was whether such a gift should be forfeited under section 15 of the
wills Act. The court decided that the gift to the chauffeur should be upheld.):
Danckwerts J The whole theory of the formulation of a secret trust is that the wills Act
has nothing to do with the matter because the forms required by the Wills Act are
entirely disregarded, since the persons do not take by virtue of the gift in the will, but by
virtue of the secret trusts imposed upon the beneficiary who does in fact take under the
will. Demonstrates that chauffeur was entitled to receive the money because
entitlement was by way of a secret trust which arises wholly outside of the will.
See Robert Pearce in Trusts and Equitable Obligations on page 508 [12] 509 for
problems associated with the modern view

ii)

Secret trusts are simply an exception to the

Wills Act. CLARIFY

THIS POINT

iii)

Secret Trusts viewed as a constructive trust

Westdeutsche Landesbank Giroentrale V Islington LBC [1996] 2 WLR 802: WHAT

IS THE SIGNIFICANCE?
Re Cleaver [1981] 1 WLR 939: Nourse J characterized secret trusts as constructive
trusts. However, it is important to note that because the case concerned mutual wills,
his opinion was strictly obiter.
McFarlane, Constructive Trusts Arising on a Receipt of Property Sub
Conditione [2004] 120 LQR 667: Stated that a number of commentators have adopted
the view that secret trusts are gratuitous promises enforced as constructive trusts on the
grounds of fraud or unconscionability.

The Theoretical Basis for Secret Trusts

A secret trust takes effect under the law of trusts rather than as a testamentary
disposition. It is important to consider whether a secret trust is an express trust or a
constructive trust.

Is a Secret Trust an Express Trust?

If secret trusts are characterized as express in nature, practical difficulties arise where
the intended trust property is land or an interest in land, as section 53(1)(b) LPA 1925,
renders an oral declaration of trust unenforceable without evidence in writing. In
contrast, if they are characterized as constructive in nature, a secret trust of land will be
enforceable without the need for further formalities as section 53(2) exempts all
constructive trusts from the need of writing.
Snell in Principles of Equity suggests that the acceptance of the trust by secret trustee
amounts to an express inter vivos declaration of trust. However, if this were the case, a
secret trust for land, in the absence of writing, would be unenforceable as a result of
section 53(1)(b). This situation arose in Re Baillie [1886] 2 TLR 660 where a secret trust
of land was held unenforceable because it was not in writing. However, in Ottaway v
Norman orally declared secret trusts of land were enforced without question.

Even if secret trusts are characterized as express trusts, a secret trust of land should not
fail for lack of writing, because the doctrine of Rochefoucauld v Boustead (equity will
not allow statute to be used as an instrument of fraud) should prevent the secret trustee
from denying the trust because of the absence of writing.

PART TWO MUTUAL WILLS

Mutual wills are a mechanism of creating a binding agreement between two parties that
the property held between them should go ultimately to the same beneficiary under
either will. When the first of the parties to the mutual wills dies, the arrangement
becomes binding on any surviving parties.

The Doctrine of Mutual Wills

Re Cleaver [1981] 2 All ER 1018 (Arthur and Flora Cleaver had married in 1967 when he
was 78 and she was 74. He had 3 children from a previous marriage and she had none.
They executed identical wills, leaving bulk of their estates to the survivor and in default
of their survival to the 3 children. After Arthurs death Flora changed her will leaving her
estate to only 1 of the children. Demonstrates practical difficulties where doctrine
of mutual wills is not used.): The Court held that there had been a mutual will and any
property Flora had received under Arthurs will was held on constructive trust for the
three children after her death.
Re Dale [1993] 4 All ER 129: The doctrine of mutual wills is to the effect that where two
individuals have agreed as to the disposal of their property and have executed mutual
wills in pursuance of the agreement, on the death of the first ("the first testator") the
property of the survivor ("the second testator"), the subject matter of the agreement, is
held on an implied trust for the beneficiary named in the wills. The survivor may
thereafter alter his will, because a will is inherently revocable, but if he does his personal
representatives will take the property subject to the trust.
Re Walters; Olins v Walters [2009] Ch 212 (This case is a recent example of how
mutual wills operate. Mr Walters and his wife made identical wills in favour of each other.
They later made codicils (codicil = written document intended to add a further provision
to the will) in similar terms. Under the codicils the property was to be divided between
their 5 grandchildren. After the death of his wife, the grandfather fell out with his
grandson and no longer wished him to benefit under his will. He argued that the wills
were not mutual wills as they lacked contractual certainty and so he was not bound. The
CoA held that mutual wills do not require the level of certainty necessary in a commercial
contract. Mummery LJ quoted from Snells Equity: Mutual wills provide an instance of a
trust arising by operation of law to give effect to an express intention of the two
testators.)
Dufour v Pereira (1769) 1 Dick 419: Lord Camden described the doctrine of mutual
wills in the following way: he, that dies first, does by his death carry the agreement on
his part into execution. If the other then refuses, he is guilty of a fraud, can never unbind
himself, and becomes a trustee of course. For no man shall deceive another to his
prejudice.
Gray v Perpetual Trustee [1928] AC 391: If two persons simultaneously make wills to
the same effect, and in that sense mutually, a second will made by one of them after
succeeding to the others estate under the originally made will is precluded form being
treated as effective to interfere in equity with the existing disposition.

Rational for the Imposition of a Constructive Trust

The rationale for imposing a constructive trust in such circumstances is that equity will
not permit the survivor to commit a fraud by going back on his agreement.
Re Dale: (1) Morrit J suggested that since the property was received by the survivor on
the death of the first testator only because of the agreement not to revoke his own will, it
would be a fraud for him to take the benefit while failing to observe the agreement, and

equity intervenes to prevent this fraud. (2) It will be an equal fraud where a mutual will is
made to benefit a third party and the contracting parties derive no benefit. Doctrine is
not confined to cases where one of the testators benefits.
Olins v Walters [2009] Ch 212: The Court of Appeal cited the reasoning in Re Dale with
approval.

Establishing Mutual Wills

Charles v Fraser [2010] EWHC 2154 (Ch) (2 sisters living together made their wills
leaving their estates to each other and provided that on the death of the survivor the
estate was to be divided between 15 beneficiaries. After the first sister died the
surviving sister altered her will passing all the property to her friend.): The court outlined
the relevant principles for mutual wills as follows:
1) Mutual wills are wills made by two or more persons, usually in substantially the same
terms and conferring reciprocal benefits, following an agreement between them to
make such wills and not to revoke them without the consent of the other;
2) There has to be what amounts to a contract between the two testators that both
wills will be irrevocable and remain unaltered. A common intention, expectation or
desire is not sufficient;
3) The mere execution of mirror wills does not imply any agreement;
4) It is not necessary that the second testator obtains any personal benefit
under the other will;
5) It is possible to have an agreement which applies to part only of the residuary estate;
6) The agreement might be oral or in writing, incorporated into the will or
proved by clear and satisfactory extraneous evidence;
7) The agreement must be established by clear and satisfactory evidence on the
balance of probabilities;
8) The agreement is enforced in equity by the imposition of a constructive trust
on the property which is the subject matter of the agreement.

There must be a contract

The doctrine of mutual wills will only be applied if the testators had an agreement that
the wills would not be revoked. The key feature is not whether or not the wills are
identical but the fact that both parties intended to be bound by the terms after the death
of the other party.
Walpole v Lord Orford [1797] 3 Ves JR 402: Lord Loughborough suggested that the
principal difficulty in establishing mutual wills was determining whether the testators had
entered a legally binding obligation not to revoke their wills rather than a mere
honourable engagement.
Goodchild v Goodchild [1997] 3 All ER 63 (A couple had made similar wills both leaving
their property to their son. When the wife died, the husband made a new will leaving his
property to his second wife. The son argued that the original wills had been mutual will
and therefore it was binding on his father. The court found that although the wills were
similar in form the wills were not intended to be binding. There was no evidence that the
parties intended to enter into an agreement to create mutual wills.): Demonstrates that
the key feature is that a contract is required for the doctrine of mutual wills to apply.
Olins v Walters [2009] Ch 212: Mummery LJ reiterated that an agreement/contract
between the two testators is a necessary condition for there to be a mutual will.

Absence of Contract

Re Oldham [1925] Ch 25: If no contract can be established between the testators then
a constructive trust cannot arise and the doctrine of mutual wills will not apply.

Mere Fact of Identical Wills

Dufour v Pereira (1769) 1 Dick 419: Lord Cottenham suggested that where identical
wills had been executed, it was possible ot infer that the parties had agreed not to revoke
them. OLD LAW
Re Oldham [1925] Ch 75: Astbury J held that identical wills although a strong
indication of an agreement, alone were insufficient and without further evidence did
not demonstrate an agreement.

Necessity of Consideration
Re Dale: In order for a contract to be established there must be consideration.
Morritt J held that consideration is satisfied when the parties have performed their
promises by executing the mutual wills.

The standard of proof

Re Cleaver: Nourse J held that the agreement not to revoke the mutual wills can only be
established by clear and satisfactory evidence and that the burden of proof is on
the balance of probabilities.

The Requirement of Additional Evidence

Re Hagger [1930] 2 Ch 190: An agreement will be found if the wills themselves
contained a statement that they had been executed on the basis of an agreement.
Olins v Walters [2009] Ch 212: Written evidence outside of the wills, demonstrating
the testators intentions, will be sufficient.
Re Cleaver [1981] 1 WLR 939: Merely oral evidence may not be sufficient, however
great detail in the will which demonstrates family conversations may make the oral
evidence sufficient.
Goodchild v Goodchild [1997] 3 All ER 63: Demonstrates that if there is contradicting
evidence, it will be weighed against each other.

Certainty of Objects and Subject

Re Cleaver [1981] 1 WLR 939: Nourse J emphasized that there must be certainty of
subject matter and of objects for a constructive trust to arise.
Olins v Walters [2009] Ch 212: It is not necessary for mutual wills to set out every
eventuality.

The Operation of Mutual Wills

Goodchild v Goodchild [1997] 3 All ER 63: Morritt LJ emphasized that the doctrine of
mutual wills is anomalous and for this reason uncertainties and inconsistencies are
tolerated which would render a more conventional trust void. - CLARIFY

Effective date of the mutual wills

While it is clear that equity imposes a constructive trust, it is less clear when the trust
arises.

Stone v Hoskins [1905] P 194: Survivor has no claim to a constructive trust where the
testator who has died revoked his mutual will and executed another in a different form.
However Robinson v Ommanney suggested that if the testator revokes his will before
death, he will have committed a breach of contract and his estate will be liable to the
survivor in damages.
Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395: The trust comes into
effect when the first of the two testators dies WITHOUT having revoked their will.
Re Hagger [1930] 2 Ch 190 (Husband and wife made mutual wills leaving property to 3
named beneficiaries. The wife died but soon after all the three beneficiaries also died.
The court held that the estates of the three beneficiaries could take the property on the
death of the husband. Their interests had crystallized as soon as the first party had
died.): Suggested that the trust will take effect at the death of the first testator.
Goodchild v Goodchild [1997] 3 All ER 63 - CLARIFY
Re Cleaver [1981] 1 WLR 939 - CLARIFY

The beneficial interest under the constructive trust

Re Hagger [1930] 2 Ch 190: Clauson J held that a mutual will trust applied only to the
property received by the survivor AFTER the death of the first testator. CONTRAST
Goodchild v Goodchild [1997] 3 All ER 63: Court of Appeal held that ALL the testators
property was subject to the constructive trust. WHICH IS THE CORRECT PRINCIPLE?
Re Cleaver [1981] 1 WLR 939 (Addresses what kind of interest the survivor has over the
trust property): Nourse J suggested that the survivor has a free power of disposal over
the property during their life, however, they must ensure that anything which was left at
their death would go to the agreed parties.
Re Oldham [1925] Ch 25 (Addresses what kind of interest the beneficiary has over the
property/ how the property is held under trust while the testators are alive): Astbury J
suggested that mutual wills create a floating constructive trust, which allow the survivor
to dispose of the property during their life, but crystalize over whatever remains at the
death of the survivor.

Question:
IT SAID THROUGHOUT THE CHAPTER THAT THE TRUSTEE WOULD HOLD THE
PROPERTY ON RESULTING TRUST FOR THE RESIDUARY LEGATEES OR THE
TESTATORS NEXT OF KIN. IS THIS THE SAME AS SAYING THE TESTATORS
ESTATE?