Definition of 'Mutual Will'
A type of will, usually executed by a married or seriously committed couple, that is mutually binding. After one party dies, the remaining party is bound by the terms of the mutual will. The purpose is often to make sure property passes to one's children rather than to a new spouse. Because of state differences in contract law, a mutual will should be established with the help of a legal professional.
Though the terms sound similar, a mutual will should not be confused with a joint will.
Investopedia explains 'Mutual Will'
For example, John and Alice create mutual wills. John dies and his property passes to Alice. Alice takes a new husband, Jay. When Alice dies, because of an agreement made in the mutual will, her property will not pass to Jay. Instead, it will go to John and Alice's children.