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Court Rejects Unprovable Claim of Property Gift

8th February 2017 By Arman Khosravi

Arguments over the division of estates are unfortunately common where the value of the assets they contain is substantial, especially if family relationships are fractious. In such circumstances, the distribution of an estate can be delayed by legal wrangling and relationships can sour further. However, a professionally drafted will is the best way there is to ensure that your assets pass to whomsoever you wish to receive them and that challenges by aggrieved people who think they have been unfairly left out of the reckoning are unsuccessful.

In addition, it is always sensible to make sure that any agreements made between family members (e.g. loans) are properly documented, so that misunderstandings cannot lead to disputes.

A recent case shows the sorts of issues that can arise. It involved a farming family, an industry in which similar disagreements are legion. Unusually, the dispute arose before the death of the farm owner. The High Court rejected claims that he had given a £2.5 million cottage to his eldest son and daughter-in-law or that he had promised to leave it to them in his will.

The son argued that the cottage was his just reward for having worked hard and for low pay in the family farming and property development business for 20 years. He and his wife had lived in the property throughout that time, bringing up their children there, and claimed to have spent about £700,000 on improving it.

In rejecting the couple’s claim, however, the Court found no evidence that the farmer had given the cottage to them when they became engaged to be married. He had also given them no binding assurance that they would inherit the property. The son had been paid for his work in the family business, from which he stood to benefit in the long term, and had no moral or legal entitlement to the cottage.

The son had knowingly taken a risk when he invested in improving a property that did not belong to him and had never had more than an unenforceable expectation that he would inherit the property on his father’s death. The farmer had not acted unconscionably and the Court noted that the possibility remained open that he would in due course choose to leave the cottage to his son and daughter-in-law.

Source: Concious

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