It helps to be clear

Putting things in writing can help to avoid misunderstandings, bad feeling and litigation.

A recent case (Habberfield v Habberfield) highlighted the importance of being clear when arranging your affairs.

The case involved an application by a daughter claiming a family farm, owned by her deceased father, or (failing that) a sum of money. The claim was brought against her mother using what is called “proprietary estoppel” or, alternatively, under the Inheritance (Provision for Family and Dependants) Act 1975. Under that Act, certain family members and dependants can make a claim against the estate of someone who has died if they will not otherwise have reasonable provision from the estate.

The daughter said that she had devoted her entire working life to the farm on the assurance that she would eventually take it over when her father retired and that she would receive the freehold at some unspecified later date. Following a dispute in 2013, however, she had left the farm. When her father died, he left his interest in the property to his wife. His wife disputed the daughter’s claim.

The Judge decided that many of the promises which the daughter said had been made were ambiguous. However, he also decided that the assurances had led to the daughter acting to her own detriment (working long hours at the farm for low pay and few holidays when she could instead have built up her own business).

He awarded the daughter the sum of £1.17m; if that wasn’t paid, it was likely that a sale of the family farm would be required.

Having decided this, the Judge did not feel it necessary to go on to make a decision under the Inheritance Act in this particular instance. If the first part of the claim had failed, however, he would no doubt have considered the Act.

Some useful lessons can be drawn from this case:

1. Be careful what you promise – particularly where someone relies on the promise to their own detriment;

2. Set out significant agreements in writing, so everybody knows what has been agreed;

3. On the matter of Wills: Wills can be challenged for various reasons. When making a Will, it is important to consider your financial obligations and to make reasonable financial provision for those close to you.

A good reason for making a Will – and, indeed, for having proper, written agreements about business and property during your lifetime – is that you can make your intentions clear. One of the problems in this case was the lack of clarity about what the man who had died (and indeed, his wife) had intended or, indeed, what they had agreed with their daughter.

Our Commercial Department can advise you regarding partnership agreements and other matters relating to business. Our Homemove department can advise you regarding property if you are considering transferring land and/or setting out in writing who is entitled to the proceeds of sale of property. Our Wills and Estates Department can advise you regarding Wills and dealing with the estate of someone who has died. And if you need advice about a possible claim against the estate of someone who has died, please contact Peter Shah in our Litigation/Dispute Resolution department.