Proprietary Estoppel and Constructive Trust Claims
If a loved one promised you property or an asset before they died, and you relied on that promise, but you later discover that their Will does not reflect this promise, you may, in some circumstances, be able to make a proprietary estoppel claim.
Whilst most people will include property and any significant assets in their Will, sometimes individuals make promises to friends or family during their lifetime which are either not reflected in their Will (and only discovered after their death) or they pre-date it.
If you believe that you have been wrongfully deprived of property or assets, our proprietary estoppel solicitors may be able to help.
We advise clients across the UK from our offices in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury. For common-sense advice, call 0117 325 2929 or complete our online enquiry form.
What is a proprietary estoppel in a Will?
Proprietary estoppel is a way of enforcing a promise relating to a property or asset/s made during a person’s lifetime.
A common example is when a parent makes a promise to a child that they will inherit the family home or business upon their death, but later the child discovers that there was no provision for this in their parent’s Will. The child could therefore be able to make a proprietary estoppel claim against their parent’s estate.
Although most proprietary estoppel claims are made after the Executor’s death, you can start a claim as soon as you realise that the Will does not reflect what has been promised to you.
What are the grounds for proprietary estoppel?
For a proprietary estoppel claim to be successful, the applicant must be able to prove that:
- A promise was made by one person to another;
- They (the Applicant) relied on that promise to their detriment: in the example above, the child must prove that they have relied on the family home being their residence and have not taken steps to rent or mortgage any other property; and
- They suffered a loss (when that promise was broken, e.g. they are unable to afford their own home so once the family home is sold or left to the named beneficiary, they are at risk of homelessness).
If these conditions have been met and it would be ‘unconscionable’ for the deceased to go back on the promise, the court can step in and consider several remedies, including:
- A grant of beneficial interest (a financial share in the property)
- A lump sum
- A right to occupy the property without paying rent or the mortgage
- A transfer of the freehold title
If a loved one promised you property or asset ownership upon their death but you have discovered that no provisions were made in their Will, our proprietary estoppel solicitors can advise you of your options and guide you through the process of making a claim.
Example case study | Proprietary estoppel claim leads to dispute between siblings
What is a constructive trust in a Will?
A constructive trust is a court-imposed remedy to solve a dispute over property ownership. It is usually used when one party ‘unfairly’ obtains ownership of a property through fraud, misrepresentation, or a breach of their fiduciary duty (e.g. their duty as an Executor). It benefits someone who has been wrongfully denied of their interest in a property, for example, in proprietary estoppel claims.
A common example of where a constructive trust is beneficial is where a property is owned in one person’s name, but their partner contributes to the mortgage. The court could agree that there is a common intention between the parties to share ownership of the property.
Blog | Do I need a Declaration of Trust when buying a property?
What are the requirements for a constructive trust?
A constructive trust arises in similar circumstances to a proprietary estoppel. The burden is on the person (Claimant) seeking to show that the relevant party, i.e. the deceased, intended their beneficial interests to be different from their legal interests. In most cases, this will be because there was a ‘common intention’ between the parties and the Claimant relied upon that intention to their detriment (for instance, by making financial contributions or making improvements to the property).
To be eligible for a ‘common intention’ constructive trust, the Claimant will have to show that:
- You and the legal owner of the property share a common intention that you have a beneficial interest in the property); and
- The Claimant would be unfairly prejudiced if the Trustee was allowed to keep the property.
TOLATA
Constructive trust claims are pursued under the Trust of Land and Appointment of Trustees Act 1996 (TOLATA). TOLATA gives the court power to determine the ownership, including ordering that the property is sold, and the proceeds distributed accordingly.
Blog | What is TOLATA?
Proprietary estoppel and constructive trust FAQs
There is no strict time limit for proprietary estoppel and constructive trust claims. However, if you believe that you have been denied property or assets that were promised to you, it is important to seek legal advice as soon as possible as if there is a delay in bringing a claim, this could be raised by the Defendant/s as a possible defence.
In addition, delay impacts on the quality of evidence as memories fade and documents can go missing.
A resulting trust applies where the shares in a property differ from the strict legal shares because of contributions made towards the purchase price (such as payment of a deposit or mortgage payments).
Resulting trusts and constructive trusts are similar, however, the key difference is that a constructive trust arises where it would be unreasonable for the deceased to deny the Claimant’s interest in the property or asset.
Resulting trusts can be more straightforward to establish because the financial trail that supports the assumed ownership can usually be evidenced through payments or bank transfers.
Both proprietary estoppel claims and Inheritance Act claims relate to a party being left without what they believe to be rightfully theirs, the main difference is the notion of a ‘promise’ or ‘assurance’.
A party can claim under the Inheritance (Provision for Family and Dependants) Act 1975 if they have been left out of a Will, have not been provided with sufficient financial provision or the rules of intestacy (if there is no Will) do not support them. Claimants do not need to have been promised anything by the deceased. In proprietary estoppel claims, there must be an element of promise.
Contact our proprietary estoppel and constructive trust solicitors
The law around proprietary estoppel and constructive trusts is complex and difficult to navigate, especially if you are dealing with the loss of a loved one. Our specialist lawyers provide straightforward and practical advice, with your best interests at heart.
For an initial conversation with a member of our Contentious Probate team, call 0117 325 2929 or fill out our online enquiry form and we will be in touch.