Can a Promise of Inheritance Be Legally Binding? Proprietary Estoppel Explained

Families do not always put their arrangements in writing.

A parent may tell a child, “One day, this house will be yours.” A farmer may promise a son or daughter that they will inherit the family farm. Someone may spend years caring for an elderly relative after being assured that they will be provided for when that person dies.

But what happens when the person dies and their Will says something completely different?

In certain circumstances, a promise concerning property oran inheritance may be enforceable even though it was never properly recorded ina Will. The legal principle most commonly involved is proprietary estoppel.

Proprietary estoppel claims can arise in some of the most difficult contentious probate disputes because they often involve informal conversations, family relationships and events stretching back many years.

At DJF Solicitors Group, including DJF Hoole & Co, we advise clients in relation to inheritance and estate disputes across England and Wales.
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What is proprietary estoppel?

Proprietary estoppel is an equitable legal principle that may prevent someone from going back on an assurance concerning property where another person has relied on that assurance to their detriment.

It frequently arises where someone has been led to believe that they will receive a house, land, a farm or another property interest in the future.

Although every case depends upon its individual facts, aproprietary estoppel claim will normally involve three closely connectedelements:
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1. An assurance or promise

There must have been an assurance concerning rights in property.

It does not necessarily have to be contained in a written agreement. An assurance may arise through conversations or, in appropriate circumstances, conduct over a period of time.

However, vague expressions of hope or statements about what someone might do in the future may not be sufficient.

2. Reliance on that assurance

The person bringing the claim must have relied upon the promise or assurance.

For example, someone may have continued working in a family business because they understood that they would eventually receive the business premises or family farm.

3. Detriment

The claimant must normally show that they suffered a detriment as a consequence of relying upon the assurance.

Detriment can take many different forms. It may involve working for little pay, providing substantial unpaid care, spending money improving a property, giving up a career or home elsewhere, or passing up other financial opportunities.

The court considers the circumstances as a whole rather thanapplying these factors mechanically.
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“I was promised the house”; is that enough?

Not necessarily.

One of the difficulties in proprietary estoppel cases is establishing precisely what was said and what the parties understood those words to mean.

Compare, for example:

“You'll be looked after when I'm gone.”

with:

“If you stay here and look after me, this house will beyours when I die.”

The second statement is potentially much more significantbecause it identifies the property concerned and links the assurance tosomething the recipient is being asked to do.

That still does not automatically establish a successful claim. The surrounding circumstances, the parties' conduct and the evidence available will all be important.

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What if the Will says something different?

A proprietary estoppel claim can potentially arise evenwhere there is a valid Will leaving the property to somebody else.

The issue is not necessarily whether the Will itself isvalid. Instead, the claimant may argue that it would be unconscionable for theearlier promise concerning the property to be disregarded after they reliedupon it to their detriment.

This distinction is important.

Many people assume that their only option is to “contest the Will”. In reality, an inheritance dispute can involve several quite different causes of action.

Depending upon the circumstances, these may include:

• challenging the validity of a Will;
• a proprietary estoppel claim;
• a trust or beneficial ownership claim;
• a claim under the Inheritance (Provision for Family and Dependants) Act 1975; or
• a dispute concerning a lifetime or deathbed gift.

The correct legal route can make a significant difference toboth the evidence required and the outcome that may be available.

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What evidence can help prove a promised inheritance?

Because inheritance promises are often made informally,evidence can become particularly important.

Relevant evidence may include:

• text messages, emails and letters;
• handwritten notes or diaries;
• earlier versions of Wills;
• evidence from relatives, friends, neighbours or professional advisers;
• evidence showing work carried out for the deceased;
• bank statements and records of expenditure;
• invoices for improvements to property;
• employment and salary records;
• evidence of care provided to the deceased;
• evidence showing opportunities the claimant gave up; and
• documents recording discussions about the property or family business.

Witness evidence can also be crucial.

A claim does not necessarily fail simply because there is no written contract recording the promise. Equally, a claimant's recollection of a conversation will not automatically be accepted simply because the person who allegedly made the promise has died.

The court will examine the evidence carefully.
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The Supreme Court decision in Guest v Guest

One of the most important modern proprietary estoppel casesis Guest v Guest [2022] UKSC 27.

The case concerned a family farm. Andrew Guest had worked on his parents' farm for approximately 33 years after leaving school at 16. He maintained that he had been led to expect that he would inherit a substantial part of the farming business and property.

The relationship between Andrew and his parents subsequentlydeteriorated and his parents made Wills which excluded him.

The courts accepted that Andrew had established aproprietary estoppel claim.

The case eventually reached the Supreme Court, principally on the question of the appropriate remedy. The Supreme Court confirmed the importance of preventing or remedying the unconscionability involved when someone goes back on an assurance upon which another person has relied to theirt detriment.

The judgment is also important because a successfulproprietary estoppel claim does not necessarily mean that the claimant willsimply receive everything they say they were promised.
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What can the court award in a proprietary estoppel claim?

The court has considerable flexibility when deciding uponthe appropriate remedy.

Depending upon the circumstances, an outcome might involve:

• transferring property;
• granting a right to occupy property;
• recognising an interest in land;
• placing property into a trust; or
• ordering a financial payment.

The Supreme Court's decision in Guest v Guestemphasised that the remedy is an equitable one and that the court must considerhow the particular unconscionability should be addressed.

This makes proprietary estoppel litigation different from a straight forward debt claim where the amount due can simply be calculated.

The likely remedy needs to be considered carefully from the beginning of the case.

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Is proprietary estoppel the same as promissory estoppel?

No.

The terms are sometimes confused but they perform different functions.

Promissory estoppel usually arises where partiesalready have a legal relationship and one party promises not to enforceparticular legal rights. It has traditionally been described as operating as a“shield rather than a sword”, meaning that it is generally relied upon as adefence rather than as an independent basis for bringing a claim.

Proprietary estoppel, by contrast, is particularly relevant where someone has been promised rights relating to property and has relied upon that assurance to their detriment.

For this reason, proprietary estoppel is the form ofestoppel more commonly encountered in inheritance disputes involving promisesof houses, farms or land.

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What about a promise made shortly before somebody dies?

There is another, separate legal principle which can sometimes apply where a person gives away an asset in contemplation of their death.

This is known as a donatio mortis causa, commonlydescribed as a deathbed gift.

A deathbed gift is legally different from proprietary estoppel and strict conditions apply before one will be recognised.

Broadly, it requires a gift made in contemplation of impending death, conditional upon death, together with the donor parting with control of the property or something representing it.

The courts scrutinise alleged deathbed gifts particularly carefully because they can operate outside the usual formal requirements applying to Wills.

We will consider deathbed gifts in more detail in a separatearticle.

Can you defend an estate against a proprietary estoppelclaim?

Yes.

Executors and beneficiaries can find themselves facing anallegation that the deceased promised property to somebody else.

Such claims should not automatically be accepted simply because the claimant says a promise was made.

Questions which may need to be investigated include:

• Was an actual assurance made?
• What precisely was promised?
• Was the alleged assurance sufficiently clear in its context?
• Did the claimant genuinely rely upon it?
• Did the claimant actually suffer detriment?
• Did they receive financial or other benefits which need to be considered?
• Is the claimant's account supported or contradicted by contemporaneous     evidence?
• What remedy, if any, would be appropriate?

Early investigation is particularly important because therelevant events may have taken place many years earlier.

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What should I do if I was promised an inheritance?

If you believe that you were promised property or an inheritance which has not been honoured, try to preserve as much evidence as possible.

Do not delete messages, emails or documents relating to thepromise. Identify anyone who may have heard relevant conversations or who knowswhy particular decisions were made.

It is also sensible to obtain specialist legal advice beforethe estate is distributed or disputed property is sold.

Equally, executors or beneficiaries who receive a proprietary estoppel claim should obtain advice before distributing the disputed asset or making substantive admissions about the claim.

Speak to a contentious probate solicitor

Disputes involving promised inheritances can be legallycomplex and intensely personal.

The fact that a promise was never written into a Will does not necessarily mean that it has no legal effect. Conversely, the fact that someone expected to inherit does not, without more, establish a proprietary estoppel claim.

The evidence and circumstances surrounding the allegedpromise, reliance and detriment must be considered carefully.

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DJF Solicitors Group, including DJF Hoole & Co, can advise individuals, executors and beneficiaries in relation to contentious probate, inheritance disputes and claims involving promises concerning property.

With offices across the country, we are able to assist clients nationally.

Contact our team to discuss your circumstances and theoptions available.

Call us today on 0203 504 9138, or email us at info@djfsolicitors.co.uk to schedule your free initial telephone consultation.

Article by Nicole Nedungadi, Private Client Solicitor at DJF Solicitors

This article provides general information about the law in England and Wales and is not a substitute for legal advice relating to your individual circumstances.

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