Inheritance dispute: High Court upholds oral agreement to share property

The High Court has upheld an oral agreement between three siblings, John Archibald, Brenda Archibald and Patsy Alexander, to share a house, following an inheritance dispute.

The property was owned by their mother, but when the house was purchased in 1997, Patsy Alexander’s name was also added to the legal documents as a joint tenant.

When their mother died, Patsy claimed sole ownership of the home through succession, which was disputed by John and Brenda Archibald.

Central to their argument was a conversion that the three siblings and their mother had in 1996, before the family home being purchased, in which they made verbal agreements about the ownership of the property.

The court heard that the meeting discussed the future of the property, agreeing that their mother would live in the house until death, and then it would be divided equally between the three children.

The oral agreement was made to protect against any other potential beneficiaries claiming an interest, such as if their mother was to get married and to mitigate against any inheritance tax liabilities.

John and Brenda stated that Patsy held the property’s title on trust for herself and her siblings, as beneficial tenants-in-common in equal shares. They believed that their participation in this legal agreement was unnecessary because of the oral agreement they held.

Patsy appealed the London County Court’s decision to rule that the property should be shared equally between the three siblings, but the High Court dismissed her appeal.

In ruling, the Judge said: “It was self-evident, that if an express agreement is made in such terms in a loving family context, the non-transferees will rely on that by not otherwise protecting their position.

 “The constructive trust in such circumstances depends on the agreed basis on which the transferee of property received it and on the fact that it would be unconscionable for them to treat the property as their own.”

For help and advice on matters relating to inheritance, Wills and estate planning, contact our expert team today.

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Natalie Payne
Natalie is a Private Client Solicitor at Mackrell.Solicitors and is based in their London office. Natalie has a very hands on approach with her clients and guides them through every step when looking after their personal affairs and/or those of their friends and family.