Trusts, Wills & Estates

How lifetime promises can affect your Will

Approximately 40% of people make a Will to deal with the distribution of their estate after death but many of those testators will not be aware that it is possible for the distribution of their assets to be affected by actions taken during their lifetime.

The doctrine of proprietary estoppel provides that if an individual makes a promise, representation or assurance to another individual during their lifetime and that person relies on that promise and, as a result, acts to his or her detriment then, if the Will of the person making the assurance contravenes that promise, on application the courts will intervene to prevent “unconscionable conduct”.

A typical scenario where a claim against an individual’s estate under the proprietary estoppel doctrine might arise is if an individual were to move into an elderly person’s home to care for them and was assured by the elderly person that in return for that care the house would be left to them. As a result, the carer provides care for free and gives up paid employment, only to find after the elderly person’s death that the house had in fact been left under their Will to another person. In that scenario, the court could find, provided there was evidence to support the carer’s assertions, that the doctrine of proprietary estoppel applies and that the gift under the Will should not take effect as drafted.

It is not sufficient for there just to be a promise (a “one day all this will be yours” scenario), the person to whom the promise is made must also rely on it and, as a consequence, act to his or her detriment. A number of cases claiming relief under the proprietary estoppel doctrine involve farms and farming families and the latest case (Davies v Davies) has recently been decided by the High Court.

The Davies case

Tom and Ellen Davies were a farming couple with five children whose family had been farming in Wales for generations. Mr Davies died in 1999 and in his Will left the family farm on trust for his son, James, until he reached the age of 60. After that date (or on James’s death if that happened first) the farm would be divided equally between Mr Davies’s other four children and James’s children.

James claimed that in fact during his lifetime his father had verbally promised him that, if he worked on the farm, it would eventually be left to him. James claimed that promises had been made on a number of occasions including when he was 16 and deciding on his future career, then when James became a partner with his parents in the farming business, and also when his parents moved out of the farmhouse to live in a bungalow built on the farm. There were no witnesses to the promises and they were not confirmed in writing.

James claimed that, as a result of the promises made by his father, he had given up plans to have an alternative career, perhaps in the police force; he had worked long, hard hours on the farm for low pay over many years and had spent over £177,000 on improvements and renovations to the farm. These claims were disputed by James’s siblings.

After consideration of all the evidence, the judge reached the conclusion that the balance of probabilities favoured James’s assertions as to the promises made by his father and that Tom Davies had, “clearly and unambiguously assured James that if he came to work on the farm…..then the farm would be his.” The judge also found that James had relied on the promise and had acted to his detriment in the ways claimed by him. As a result the judge considered it to be “unconscionable” for the provisions as to the family farm in Mr Davies’s Will to take effect and awarded the whole of the farm, excluding the bungalow in which his mother still lived, to James outright.

Lessons to be learned

This case does not extend the doctrine of proprietary estoppel in any way but provides a typical example of circumstances when it might apply. It shows that, in claims of this nature, the evidence as to the facts of the case and the judge’s assessment of the reliability of the witnesses is crucial.

It was stated in evidence that one of James’s brothers had unsuccessfully tried to get his father to take advice at the time of his retirement. If Mr Davies had taken comprehensive advice, to include structuring the succession to the farm, the circumstances that led to one of his children claiming against the others might have been avoided.