Clients often bemoan the actions of a rich relative or friend who has led them to believe that they stand to inherit their estate, only to find that the deceased has left them little or nothing in his or her Will or, where there is no Will, that they do not inherit under the Intestacy Rules. So, do they have a right of action? Well, they may do.
The potential way forward involves the doctrine of proprietary estoppel. Legal gobbledegook? It certainly sounds like it but broken down into its three constituent parts it becomes easier to understand. Firstly, the deceased must have made representations to the other person. Secondly, that person must have relied on those promises and thirdly, done so to their own detriment.
More often than not such claims arise in a family context, where there are no or precious few documents, and the claimant relies on conversations with the deceased. Fairly obviously the deceased is unable to give evidence and, unless there are witnesses, the court must weigh carefully what may be self-serving evidence from the person who claims that the promises were made to them.
How clear do these promises need to be? Context is all.In one case repeated assurances that “one day all this will be yours” to get the claimant to commit his future to the business were enough. In another case the court was satisfied when the deceased gave the claimant his insurance bonus notice, telling him this was for his death duties.In other actions phrases including that the claimant would “never want for anything” and “would always have a home and be secure in this one” were not enough.
That brings us to the second and third elements of the doctrine, reliance and detriment. The claimant not only needs to satisfy the court that he relied on the representations made by the deceased but that in doing so acted to his own detriment. That detriment often but not always has a financial element to it, for example working for an extended period on the family farm for a pittance or equally as a result of caring for a parent missing out on the opportunity to build a better life.
Essentially the law will intervene when it would be unconscionable to allow the deceased to break promises made which the claimant relied on to their detriment.
Many proprietary estoppel cases involve farming families. It is easy to understand why. Often whilst the capital value of the farm may be high, whilst the income generated is modest, leaving family members working for years for minimal reward based on the promise of jam tomorrow.
If a claimant can satisfy the court that theirs is a legitimate claim, what share of the estate, can they expect? A claimant will not necessarily receive all that they were promised. The court’s approach is to do the minimum necessary to do justice to the claim. That said, awards in recent years have been more generous.
In Davies v Davies the claimant’s parents made different promises over the years. She had worked for low pay, expecting to receive the whole of the land and business. She left the farm twice though and was not there at the end of her parents’ lives. The estate was worth £4.4 million. She was awarded £1.3 million, reduced to £500,000 on appeal.
In Moore v Moore the claimant claimed that his father had promised he would inherit the farm and business. He was poorly paid for many years but his accommodation and expenses had been paid for and he had been made a partner in the business. The court ordered that the son could continue to benefit from the partnership assets and live at the farmhouse, paying for its upkeep.
Proprietary estoppel claims can often be joined with a claim under the Inheritance Act where, for example, a surviving spouse or a child do not believe that they have received reasonable financial provision from a deceased’s estate. Together these rights of action can provide a valuable legal weapon for disappointed would-be beneficiaries.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.