Do you have great expectations?
Posted on 26th January 2023
The estate included a farm which the son said his father promised would be his. He worked on the farm for up to 130 hours, receiving very little pay, in the expectation that he would receive the farm from his father.
However, when his father died in 2018 he and his brothers and sister weren’t left anything in his Will. The son argued that his father didn’t have mental capacity or didn’t know and approve their contents when he made the last two Wills which removed him as a beneficiary.
Father had been diagnosed with a cerebral disease in 2011 and the family increasingly took on more responsibility for him and the farm. The most recent Wills were created within months of his father’s new marriage in 2016.
The son’s legal advisors argued that the principle of ‘proprietary estoppel’ applied since he had been given an assurance from his father that he would inherit the farm. The term estoppel means preventing someone from going back on something they have previously said or agreed.
Promises and assurances are common causes for inheritance disputes, especially in the farming sector. Proprietary estoppel establishes a legal principle if, for example, a father promises a child that they will inherit the family farm if they continue to work on it for little or no pay. The child might otherwise have chosen a different career where they would have a significantly higher income, so denying their claim would be unjust or inequitable.
Three things are needed for the principle to apply: assurance, reliance and detriment.
Assurance – firstly, it must be possible to show that a representation or promise was given. This must clearly refer to a specific property. A promise of financial security wouldn’t be enough. For example, giving someone the deeds to the property might be an indication of intention. If someone clearly has expectations and the property owner doesn’t correct them, this can also be taken into consideration. However, a promise to negotiate isn’t the same as an assurance.
Reliance – where someone has been given an assurance that they will inherit a property and they act to their detriment because they have relied on it the principle would be established. This might include working for little or no pay or investing in the property, for example.
Detriment – financial detriment is the most common consideration but it doesn’t have to be in the form of money spent or invested. The assurance could be in the form of behaviour as well as words. The detriment must be ‘substantial’, so continuing to work on a farm when there had never been an intention to do anything else probably wouldn’t meet this requirement. The court has a lot of discretion but when it grants a remedy it must be proportionate.
To avoid confusion and disputes the best solution is to discuss your wishes and intentions with your beneficiaries and to make sure they are properly recorded in your Will.
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