- The law relating to cohabitees can result in an unsatisfactory distribution of assets on death
- A non-owning party to a property may be able to establish a proprietary right
- A Deed of Variation can be used to “re-distribute” an estate after death but does require the agreement of all relevant parties
- Certain circumstances can lead to a possible claim under the Inheritance (Provision for Family and Dependants) Act 1975
As a specialist in contentious trust and probate matters, I often find myself dealing with situations where the law has not delivered a satisfactory conclusion or where there is some dispute. Such situations can get incredibly emotive and usually require some careful handling.
I have a meeting today with a new client, who was a referral from an accountant contact of mine. The lady in question, Samantha Collins, tells me that her long-term partner Tom has tragically died recently, leaving her with an eight year old child Ben by Tom.
Unfortunately, although Samantha and Tom had been living together for ten years and had a child, they were not married and most of the assets in the relationship were in Tom’s sole name. We discuss what those assets are and the likely size of Tom’s estate.
Samantha has been working part time for some years and does not have enough income to support her and Ben. To further complicate matters, Tom has two adult children, Paul and Robert, from a previous relationship who are not close with Samantha or Ben.
Samantha tells me that she has been incredibly shocked to learn that she is not entitled to anything from Tom’s estate and is despairing of how she is going to cope. She asks for my advice.
I tell Samantha that the starting position, as Tom did not leave a will, is governed by the laws of intestacy. These set out who gets what when someone dies without a will. In this case, as Samantha was not married to Tom, she is not entitled to anything. The whole of Tom’s estate will pass equally to his three children – with Ben’s share in trust given his age.
While Samantha is pleased to hear that Ben will get something from Tom’s estate, she is still concerned that she will not have enough income to live on. Her main worry is that the house in which she and Tom lived was in his sole name. To make matters worse, Paul and Robert are demanding that she and Ben move out.
I advise Samantha that all is not lost and that there are a number of ways in which her situation may be protected. Firstly, we explore whether Samantha may have acquired some form of beneficial interest in the house. I tell her the starting position is that the beneficial ownership of the house follows the legal ownership. The presumption is therefore that the house was entirely Toms. However, I advise that it is possible to rebut this presumption in certain circumstances – such as where the non-owning party makes contributions to the mortgage for example, or where there has been a common intention that the house is to be jointly owned.
Samantha admits that Tom paid the mortgage and all outgoings on the property and says they never discussed the ownership of the house. After some further discussion around the topic, I conclude it will be very difficult to establish that Samantha has acquired a proprietary right in the house.
Next we explore whether Tom ever made any promises or assurances to Samantha about what would happen to her or the house if he was to die. She tells me that they never had any such conversations. Tom was young and his death was completely unexpected. This rules out the possibility of Samantha making any so-called proprietary estoppel claim.
I tell Samantha that it is possible to vary how someone’s estate will pass by making a Deed of Variation (as long as this is executed within two years of the death). I explain what this is but confirm such a deed will require the agreement of the beneficiaries to Tom’s estate ie, Paul, Robert and Ben (or someone acting on his behalf). Samantha tells me that there is no way Paul and Robert would agree to anything that would reduce their entitlements and so this in not a possibility.
This leaves Samantha with really only one option. I explain that she could potentially consider making a claim against Tom’s estate under the Inheritance (Provision for Family and Dependants) Act 1975. Samantha has not heard of the Act before and so I explain all about it. I say that Samantha would have to show that the intestacy rules do not make reasonable financial provision for her maintenance from Tom’s estate. I suggest that given the length of her relationship with Tom, the size of the estate, the difficult financial position she is in, the fact she has Ben to look after and they will need somewhere to live and the fact that Paul and Robert are independently wealthy are all factors which the court would take into account when considering a claim under the Act. My initial advice is that there are good prospects Samantha will get something from the estate, but that I will need more detailed information from her and in relation to the estate before I am able to estimate what that provision might be.
I suggest to Samantha that once I have that information, we should open discussions with Paul and Robert by informing them of a possible claim under the Act. Given Samantha’s difficult financial position, I agree to investigate the possibility of us acting for her under a conditional fee agreement.