16 June, 2023
It is not unusual for individuals to make promises to their loved ones about their estate.
"My father promised me I would be looked after when he had gone but he's left me out of his Will" is a common phrase, we hear on a regular basis.
Often if those promises do not materialise in the Will, this can lead to disappointed beneficiaries. The executors are legally bound to follow the contents of the Will unless that Will is challenged or another claim against the estate is brought. This means broken promises can lead to full-blown inheritance disputes with disappointed beneficiaries feeling that the last Will of their loved one does not reflect their true wishes.
Challenges to the validity of an individuals last Will are complex. The disappointed beneficiary needs to collate a mountain of evidence, including expert medical evidence to support such a claim. This evidence does not exist in all cases.
In cases where no provision has been made at all, some disappointed beneficiaries may have a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision but that in most cases is limited to the provision of maintenance.
If neither of these claims can be brought, disappointed beneficiaries may wonder if there is any merit bringing a claim based on a broken promise.
The answer is not straightforward and can depend on the type of promise made to an expectant beneficiary. Generally speaking, a promise that an individual will be 'looked after' or left a specific gift means very little unless that gift is contained within the Will. In some cases, promises may have been made about money or other assets that do not exist. In which case, there is no legal recourse available.
The doctrine of proprietary estoppel, can arise where the Claimant acts to his detriment in reliance upon a representation made in relation to specified property. Once these elements are satisfied, the Court considers whether it was unconscionable for the representator to go back on the promise. The Court then has the power to remedy the broken promise.
In essence a claim for proprietary estoppel arises where
For example, consider a situation where an elderly man promises his daughter his house if she becomes his full-time carer until his death. If the daughter moves in with her father, leaves her job/career in the process, cares for her father until his death but he then leaves his house to his son, then this could give rise to a proprietary estoppel claim.
That said, often proprietary estoppel claims can be difficult to establish as one party to the agreement is no longer alive to give evidence on the agreement made. The evidence of the Claimant can also be seen as 'self-serving'.
If the claim can be established, it is very effective since it avoids the need to consider the provisions of the Will or the intestacy rules and is preferable to 1975 Act claim since the Claimant does not need to come within the categories of applicant and is not limited to reasonable financial provision (for maintenance).
Several cases in recent years have been brought during the lifetime of the person who made the promise and have involved next generation farmers claiming an interest in farms owned by family members. In those cases, the courts have approved the concept of accelerating an inheritance and not waiting until the death of the promissor if they are taking steps which are inconsistent with them giving effect to their promise.
The most recent of these came before the Supreme Court in December 2021, but it did not deliver its judgment until October last year. The essential facts were as follows:
The case was heard first in the High Court which decided to award Andrew a lump sum payment equating to 50% of the market value of the dairy farming business and 40% of the market value of the farmland and buildings (which was owned by Andrew's dad).
Andrew's parents appealed to the Court of Appeal, but the appeal was rejected. In a further appeal to the Supreme Court at the end of last year Andrew's parents argued that the amount of the award had not be quantified properly, was disproportionate because it went beyond what was necessary to do justice in the case and relief should not be granted whilst Andrew's parents were still alive. It was argued that the award did not balance the interests of Andrew and his parents or those of others who would have a claim on their estate such as Andrew's siblings because it would necessitate the sale of the farm.
The appeal succeeded to a limited extent because whilst the court ordered that the lump sum equating to 50% of the farm business had to be paid now, the further lump sum equating to 40% of the farmland could either be paid now or, alternatively, could effectively be deferred if Andrew's parents set up a trust holding Andrew's share in the land thereby preventing the need for it to be sold now. The court has directed that Andrew and his parents agree the terms of the trust. The court felt that this struck a better balance between meeting Andrew's expectations and the burden placed on his parents by accelerating Andrew's inheritance. Andrew had expected to receive an inheritance of the farmland when his parents died. Forcing the sale of the farmland now to fund the payment of a lump sum during his parent's lifetime would award Andrew more than what he was promised.
Proprietary estoppel claims involve significant fact-finding and are heavily reliant on witness statements. Ultimately, the outcome of claims will depend on how a Judge views all the evidence before the Court.
For more information contact Nicola Smith in our Contesting a Will department via email or phone on 01618308810. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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