A survey from Will Aid shows that more than half of parents in the UK do not have a will. Even when wills are made they are sometimes subject to challenge where children do not believe the terms of the will reflect their parents’ true intentions or do not record promises made. If you have been promised part of an estate, a specific property or otherwise, it is wise to have such a promise evidenced in writing and/or witnessed by an independent third party. Reliance on a promise without such evidence may leave you with less than you had anticipated and lead to an unpleasant inheritance dispute.
Beneficiaries typically have two options where promises are not upheld:
- a claim for promissory/proprietary estoppel; and/or
- a claim under the Inheritance (Provision for Family and Dependents) Act 1975.
In respect of estoppel claims, a claim can equally arise from a promise for a sum of money or a non-specific benefit (promissory estoppel) as it can arise for property or land (proprietary estoppel). We previously blogged on whether you can enforce a promise and set out the four key requirements for estoppel claims, namely:
- whether there is/was a promise;
- whether the claimant relied on that promise;
- whether it was to the claimant’s detriment to rely on the promise; and
- whether it would be unconscionable for the Court not to grant relief.
A case hit the BBC headlines recently in respect of a man, Mr Clive Shaw, bringing a proprietary estoppel claim in the High Court against his (living) parents on discovering that they had written him out of their wills. This was because he allegedly ‘hated the cows’ that lived on the family farm. The decision has been reserved until a later date however it serves to highlight the continuing rise in the number of farming disputes and proprietary estoppel claims against living defendants (rather than claims against the deceased’s estate). Other successful proprietary estoppel farming cases include Habberfield v Habberfield  and Thompson v Thompson . Please see our Contentious Trust and Probate Round-up, Summer 2018
In a similar farming related case (Moore v Moore) the son of a mentally incapacitated farmer successfully asserted the doctrine of proprietary estoppel and persuaded the High Court that his father had repeatedly promised him the whole of the £10 million family farm years ago. In 2016 he was awarded his father’s interest in the farm and took control of the farm. The decision was appealed and it was reported earlier this week (27 November 2018) that the Court of Appeal has ordered that his mother, Pamela Moore, should receive £2 million in order to have a ‘clean break’ from her son after the long-running dispute. The money will compensate her for leaving the Grade 2 listed Manor Farmhouse where she currently lives and provide her with an income which is independent from her son, with whom she has a fraught relationship. Judgment has not yet been handed down but the decision represents a new development in this area of law. Lord Henderson expressed his view that the award was not enough to reflect Pamela Moore’s role as a mother and her long marriage.
Within families, it can sometimes be difficult to convince people of the need to formalise agreements in writing. However, committing pen to paper when promises are made is crucial as is obtaining early legal advice to ensure the understanding of all parties’ is properly recorded, should a dispute ever arise. Incredibly, 22% of beneficiaries are confident they are in a will but do not know what they will inherit, whilst 18% of beneficiaries are not aware they are in a will because it is never discussed (Will Aid, 2017). Well-drafted witness statements will prove crucial in supporting an estoppel claim, particularly where there is a lack of contemporaneous evidence of the promise made.
1. How long do I have to bring a claim?
Estoppel claims are neither contentious probate actions nor are they claims against ‘the personal estate of a deceased person or to any share or interest in any such estate (whether under a will or on intestacy)’ subject to section 22 of the Limitation Act 1980. They are trust claims and as such care must be given when assessing the relevant limitation period, taking into account the individual circumstances of the case. Generally speaking, there is no limitation period for an action to recover trust property or proceeds of trust property from the trustee (section 21 of the Limitation Act 1980), although advice should always be sought to confirm the relevant limitation period.
2. What am I likely to receive?
The relief awarded by the Court must be appropriate and proportionate. The Court can only award the minimum equity needed to do justice i.e. to return the person to the position they would have been had the promise not been made. There may therefore be a difference in what the claimant was promised or expects to receive and the actual detriment they have suffered.
For example in the Moore v Moore case above, although the son was successful and took over the £10 million farm, the Court ordered that his parents should continue living at the farmhouse, that he should be financially responsible for maintaining and repairing it and that his parents should receive an income from him going forward. The decision was controversial in that his mother, Pamela, would have been entitlement to half of the estate due to her 50 year marriage had she arguably not been overridden by her husband’s promises to their son. The recent Court of Appeal decision awarding her £2 million pounds hopes to ensure that Pamela is comfortably provided for and to bring an end to the long-running dispute.
3. Should the claim be brought once my parents’ have passed away?
Not necessarily. There are more cases where potential beneficiaries are seeking to enforce promises made whilst their parents are still alive. The advantages of doing so are that it guarantees certainty as to the division of assets upon death and enables the opportunity for the promisor to be cross-examined at trial. One of the greatest challenges of bringing estoppel claims once the promisor has died is that potentially the most compelling witness is dead and there may be few contemporaneous documents to rely on.
A potential disadvantage of bringing a claim in the lifetime of the family member is that the Court may, as in the recent Court of Appeal decision in Moore v Moore, have to consider their needs when making its award to ensure it does not cause undue prejudice.
1975 Act claims
It may also possible to bring a 1975 Act claim where a will or the intestacy failed to make reasonable financial provision. Such claims require an objective assessment of whether reasonable financial provision has been made for that specific class of applicant and if not, what provision should be made. The Court will have regard to the following section 3 factors when exercising its discretion:
- the financial resources and financial needs that the following individuals have or are likely to have in the foreseeable future:
- a, the applicant;
- b, any other applicant; and/or
- c, any beneficiary of the estate
- any obligations and responsibilities which the deceased had towards any applicant or beneficiary
- the size and nature of the net estate of the deceased
- any physical or mental disability of any applicant or any beneficiary
- any other matter the court may consider relevant, including the conduct of the applicant or any other person
Whilst it is possible for adult children to bring claims under the 1975 Act, it is more difficult to be successful if the individual is in a reasonable financial position and was not being maintained by the deceased. Claims may be more likely to succeed where the applicant is in difficult financial circumstances, for example in Illot v The Blue Cross and others  where the successful adult child was almost entirely dependent on state benefits, but the extent of any award will often be quite limited and the Courts will be reluctant to disregard the provisions of any will because testamentary freedom is an important right in this country.
Whilst inheritance is a matter people often shy away from, recording any agreements reached is to the benefit of all involved in the long-term. Understanding when action should be taken and what can be achieved is important before making any decision to pursue a promise made by a family member. The recent Court of Appeal decision in Moore v Moore demonstrates that estoppel claims against living family members are not without controversy, with the Court having to balance the interests of those who have been rightfully promised their inheritance and the need to properly provide for other family members.