A testator can enter into a contract to provide for someone in his will or to not revoke or change a will. For instance, a testator may contract to provide for someone that took care of him before he died.
A valid contract to make certain provisions in a will or not to revoke a will is generally enforceable, and to be valid, the contract must satisfy the legal requirements of a contract, including an offer, acceptance, and consideration. To prevent fraud, many states apply the Statute of Frauds requirements on contracts to make or not revoke a will; hence, the contract must be in writing. Oral contracts may be enforced by clear and convincing evidence. If the gift was for services rendered, or some other consideration, then an oral contract may be enforced under the principle of equitable estoppel, especially if the gift is an appropriate remuneration for the consideration given.
To further reduce the incidence of fraud with oral contracts, §2-514 of the Uniform Probate Code, which many states have adopted in whole or in part, requires that:
- provisions of the will must state material provisions of the contract;
- or there must be an express reference in the will to the contract and extrinsic evidence, usually a writing or testimony, to prove the terms of the contract;
- or there must be a writing, signed by the testator, evidencing the contract.
Some contracts may stipulate that any change in a will is a breach; other wills may be worded such that a breach occurs only if a contract is revoked.
If there is a contract breach, then the court may require that the gift intended for the wronged party actually go to the party, or may provide an award of damages, so that the wronged party either receives the property contracted for or its equivalent value.
A will contract can cause potential probate problems. These problems result from 2 basic principles regarding wills and contracts:
- a creditor is paid before any beneficiary
- and a beneficiary under a breached contract becomes a creditor.
A beneficiary under a breached contract (contract beneficiary) has advantages over other beneficiaries. If the contract beneficiary dies before the testator, then the beneficiary's estate still receives the property or its equivalent because of the breach. If the deceased beneficiary was not a creditor, then the will or law would stipulate who would receive the property. Another advantage is that if the estate—after deducting taxes and expenses—does not have enough to pay everyone in full, then ordinary beneficiaries usually get a pro rata share of what is left. However, a contract beneficiary will be paid in full before any other beneficiary is paid anything.
Joint and Mutual Wills
A contract not to revoke or change a will naturally arises in joint wills or mutual wills.
A joint will is a single will executed by 2 or more testators. In most cases, the testators are spouses. The typical testamentary scheme of a joint will is that when a spouse dies, the deceased spouse's property goes to the surviving spouse, and when the surviving spouse dies, the property goes to designated beneficiaries agreed to by both spouses, usually the children. A joint will can be changed only by the consent of both testators, but only while they are both still alive. After one dies, then, without a contract or a presumption of a contract to change or revoke the will, the surviving spouse can change or revoke it, thereby thwarting the testamentary intent of the first decedent.
A mutual will (aka mirror will) typically has the same testamentary distribution and objective as a joint will, but each testator executes their own will. However, each will has identical provisions except for the designated initial recipient of the testator's property (hence, the term mirror will), which in most cases, stipulate that the property of the deceased testator goes to the surviving spouse.
Absent a contract that changes or revokes a joint or mutual will, then, in many states, there is a presumption of a contract not to revoke or alter a joint or mutual wills unless the changes are agreed to by both parties.
Many jurisdictions presume a contract to not change or revoke wills in joint and mutual wills because otherwise the property distribution of the 1st testator to die may be changed by the surviving testator, thus, possibly distributing the deceased testator's property differently from what he wanted.
The modern trend, as evidenced by UPC §2-514, states that there is no presumption. Of course, without a presumption of a contract or a written contract requiring that the will not be changed, then the last surviving member of the joint or mutual will can dispose of all of the property as she pleases.
Joint and mutual wills should be avoided because they cause much litigation that often alters the testamentary intent of the 1st testator to die.
Spousal Protection Rights
Surviving spouses usually have rights over other beneficiaries, and possibly even contract beneficiaries. The pretermitted spouse doctrine (in this context, pretermit means to omit) applies if a surviving spouse remarries, then dies, but fails to include the new spouse in her will. Many jurisdictions assume that the deceased spouse meant to include the new spouse in her will but failed to do so. Under the pretermitted spouse doctrine, the omitted spouse is allowed to take his intestate share of the deceased spouse's property.
Most states also have an elective share doctrine which allows a surviving spouse to take a minimum of the deceased spouse's estate regardless of the will's provisions.
In all jurisdictions, creditors other than contract beneficiaries, are paid before any beneficiary, including the surviving spouse. In most jurisdictions, contract beneficiaries also take before the surviving spouse, but a few jurisdictions suppose that allowing contract beneficiaries to take before the surviving spouse dissuades a surviving spouse from remarrying, and most things that interfere with a person's right to marry is considered against public policy; therefore, these courts reason that allowing contract beneficiaries to take before the surviving spouse is also against public policy, and, therefore, don't allow it.