The concept of proprietary estoppel and construct trust are used to prevent a person from gifting assets promised to, or really belonging to, someone else. Where the person who has been promised the land or property has relied upon that promise – perhaps by working on the land for little or no pay or by compromising their options in reliance on the promise – that person might be able to take action to enforce that promise.
These are often complex claims, both to bring and to defend. Whichever side of the argument you are on, our expert team can advise you of your options and guide you through the process.
The contents of a joint account pass automatically by law to the surviving legal owner upon the death of the joint account holder. This can result in an injustice where all the funds in that account came from the deceased and there was no intention to gift. In such a case, the estate will argue that the surviving account holder is in fact holding the account on trust for the deceased account holder and their estate. A common example of where this might arise is where a carer (perhaps a family member) is added as a joint account holder to an account so that they can help with shopping or payments.
When making this arrangement, the original account holder may have had no idea that the result of their decision was that the funds would pass to the surviving account holder. The principle of constructive trust can apply in these situations, such that the surviving account holder is found to be holding those funds on (constructive) trust for the estate.
Proprietary estoppel in the context of disputed wills and estate claims arise where property or land has been promised to person A but the land is then gifted by will or intestacy to person B. Person A may seek to challenge the gift by arguing that the owner should not be allowed to break his promise.
To succeed with such a claim, person A will need to establish the following;
If person A can establish that a claim exists by proving all of the elements outlined above, the next question is how Person A should be compensated. Should the promise be fulfilled or should person A be compensated for his detriment? This question has been the subject of much debate in the courts and in reality will turn upon the proportionality between the promise and the detriment.
For more information on how a court may resolve this sort of claim click here [HYPERLINK TO CASE STUDY ON GUEST V GUEST]
A constructive trust can arise where someone (person A) has contributed to or entirely met the cost of acquiring property which is legally owned by person B. If person B tries to take property for himself or gift it to someone else, person A can stop him from doing so by asking the court to construct a trust in his favour – in other words, to impose a trust such that person B does not really own that property but rather holds legal title for the benefit of person A (or person A and person B in particular shares).
These cases most commonly arise in connection with ownership of the family home where the home is in the legal name of only one party but where both parties have financially contributed to that home either by mortgage payments or perhaps funding renovations over a period of time. These cases often go hand in hand with proprietary estoppel as they often also involve a ‘common intention’ – a promise between the parties that whilst the property is legally owned by one, it really benefits them both (referred to as a common intention constructive trust) and very commonly involve a detriment on behalf of the person who does not hold legal title.
These cases are legally complex and frequently involve evidence over a very long period of time. For advice on bringing or defending an alleged claim under proprietary estoppel and/ or constructive trust contact our specialist team.
These cases can be complex and difficult to run, and as a result can be expensive. We are able to offer flexible cost arrangements depending upon your circumstances and the facts of the case, including ‘no win no fee’ or deferred fee arrangements. To discuss your options in more detail, contact us.