Probate Court Costs – Mutual Wills

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    Regardless of the type of claim, liability for costs incurred by the litigants in any proceedings has always been a contentious issue. Save for a few limited situations, claims concerning wills and estate disputes are no different.

    In probate actions, the courts have long since applied a different rule, displacing the general rule that costs follow the event. The two circumstances where this different rule may be applied are:

    If the people making the will or those interested in the estate are the cause of the litigation, the costs may properly be paid out of the estate. If there existed reasonable and sufficient grounds to question the validity of the will, the costs may be borne by those who incur them.

    Today we will examine two issues, the problems with Mutual wills; what they are and how they work and who actually pays for the litigation when things go wrong.

    Mutual wills are wills made by two (or more) people who agree not to revoke them without the consent of the other(s).

    If we compare mutual wills to mirror or Joint wills there is not a lot of difference except the latter will allow the parties to change their Will in the future, even after first death.

    This point of being able to ‘un-revoke’ Mutual wills was examined in the case of Charles V Fraser, in this case 2 sisters made identical wills and several years later the first sister died. The remaining sister then went on to make a new will naming a new beneficiary who was a friend of the second sister in this case it was a Mr Fraser. On the second death Mr Fraser inherited under the new will, however this was challenged by the family who successfully bought an action to reclaim the money from Mr Fraser.

    Mutual wills are usually made between two persons, normally being close relatives or spouses. When the first person dies (provided neither of them have revoked or amended their will), the other inherits the estate of the deceased and from thereon can no longer change their own will as seen in the case above.

    The Beneficiaries named in a mutual will which is subsequently revoked by a later will, in breach of a mutual wills agreement, are entitled to bring a claim for a constructive trust in relation to the estate assets. The costs in such an action can be significant so where should liability for costs fall? This was exactly the question faced by the Court of Appeal in Shovelar and others –v- Lane and others [2011].

    In this case, the County Court found in favour of an agreement for mutual wills and granted a declaration that the estate be held on trust for the claimant beneficiaries. The County Court also ordered, amongst other things, that the defendants pay the claimants’ costs of the litigation, applying the general rule of costs follow the event. The defendants appealed the costs decision on the basis that the different rule in probate actions should apply.

    The Court of Appeal dismissed the appeal and upheld that in these circumstances the general costs rule will apply. The decision turned on the finding that this claim was not a probate action and, therefore, could not attract the different costs rule; it was a Chancery action for a declaration of trust, albeit one arising out of the execution of mutual wills.

    It is a common misconception that all costs incurred as a consequence of litigation concerning wills and estate disputes will automatically be met by the estate fund.

    That has never been the case; the court will only apply the different costs rule in probate actions where particular circumstances are apparent. Litigants should take early legal advice on the costs position at the outset of a dispute so the commercial merits of pursuing or defending an action may be properly assessed.

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    Matt Walkden Will Writer

    About Matt Walkden

    I am a Professional Will Writer and I offer a small number of other products that complement my Will Writing such as Lasting Power of Attorneys (LPA’s), Fixed Price Estate Administration, often called Probate and some Property Products such as changing a family home from Joint owners to Tenants in Common.

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