Two adult daughters claimed an equitable interest in their late father’s estate based on their understanding that their parents, their father and his first wife, had organised their estates so that the estate of the surviving spouse would pass to the daughters in equal shares. It was on the basis of this understanding that both daughters each paid a monthly sum to their parents towards their living expenses. These sums continued to be paid up to their father’s death.
Their father and his first wife had run a shop and bought a nearby house. After their retirement, in late 1986, one of the daughters bought the shop and converted it into a house. The parents gave the proceeds of the sale of the shop as various gifts, after taking tax advice, to the second daughter, intending to put her on an equal footing with her sister who had previously received monetary gifts of similar value. At this point the daughters began paying monthly sums to their parents for their living expenses. None of these arrangements were documented. However, as the father refused to let one daughter reduce her monthly payments to him when she was in difficult financial circumstances, the Court found the father regarded the payments as morally binding.
The first wife died in 1995, leaving her estate to her husband. In September 1999, the father made a Will, which he discussed with both daughters. He suggested he planned to leave his second wife a pecuniary legacy and give her the right to continue living at the house for the rest of her life and reassured both daughters they would still inherit in equal shares. However, this Will has been destroyed.
In 2002, their father re-married but did not invite his daughters to his wedding. In the same year he made a new Will which left his estate to his second wife if she survived him for more than 28 days. The Will further provided that if his second wife predeceased him or failed to survive him for 28 days, the estate would pass in equal parts to the grandchildren and step-grandchildren. This would leave the two daughters with nothing, despite their monthly contributions to their father’s living expenses which continued after his second marriage. On the arrival of another grandchild, the father made a final Will which again left his estate to his second wife or in equal parts to his grandchildren and step-grandchildren with nothing for his daughters. His second wife had been told that the daughter’s monthly instalments were repayments of monies loaned to both when the shop had been sold. The Court found that the monies given to the daughters when the shop was sold, were genuine gifts and the father was concealing the true nature of what the monthly payments were for to keep up appearances.
This final Will was valid and the Court had to consider whether the father’s estate was bound by a proprietary estoppel precluding him from disposing of the estate as he wished, which meant the daughters would inherit equal shares instead of the second wife or grandchildren. If it was found that there was no proprietary estoppel, the daughters may still have a claim against their father’s estate for the money contributed towards his living expenses. Propriety estoppel can arise where a person has received an assurance relating to property or an estate, it was reasonable for the person to rely on that assurance and the person has suffered detriment as a result of that reliance. It has to be shown that it was unconscionable for the person who made the assurance to renege on it. Here the daughters had to show their understanding was based on assurances from their father that they would inherit his estate because they had contributed towards his living expenses and it was immoral for him to renege on that understanding.
The daughters proposed holding the proceeds of the house sale in trust for the second wife to draw on to meet her care needs, as she was in frail health and needed to move into a care home, and the reminder would go to the daughters in equal shares.
The Court found that although the father benefited from the payments made by his daughters, he regarded them as return for an advance on their inheritance when the shop was sold in 1986 as he had permitted one daughter to buy the shop at half the market rate at the time and the proceeds were given to his second daughter. The daughters had made an assumption that they would inherit their parents’ property in equal shares because there was no one else to inherit it.
The father did give his daughters assurances in 1999 that they would inherit in equal shares, but this did not give rise to any detrimental reliance as they would have continued to pay their monthly sums regardless. Therefore no propriety estoppel arose, so the father was able to make his later Wills freely and it was not unconscionable for him to leave his house to his second wife. As the father clearly felt that the payments were in return for an advance on their inheritance, there was no basis for a restitutionary claim.
The Court felt it was understandable that, having contributed towards keeping their father’s house as a family asset, the daughters felt they should inherit what was left of their father’s estate after his second wife had been cared for, however, it was not the function of the Court to re-write a valid Will to produce an objectively fairer division of his estate.
This case shows the importance of making a Will that clearly reflects your wishes.
If you wish to make a Will, please call 01858 445480 now or complete one of the on-line forms. You can make an appointment at any of our branches in Market Harborough, Wigston or on Uppingham Road in Leicester. We can also arrange a home or hospital visit if you are unable to attend any of our offices due to your ill health.
