“My parents own a farm at which I worked for decades for low wages on the understanding that I would ultimately inherit it and be able to run it as a viable business. Even though there was no written promise of me getting the property, they verbally assured me I would inherit the farm. After a huge argument over my pay during the cost of living crisis, my parents removed me from their wills. This decision is devastating for my finances, drastically impacting my future plans. Should they be forced to give me compensation based on the value of the farm? What other remedies might I have for this loss?”
This was the reply from Samara Dutton, partner at law firm Collyer Bristow, in the FT
Samara Dutton, says “you have the makings of a strong claim against your parents. Promises are not contracts and so are not usually enforceable. However, in England and Wales, where you rely on a promise to your detriment, you may be able to apply to overturn this.
Here, you have accepted low wages, and no doubt structured your life in a certain way for years on the expectation that you would inherit the farm on your parents’ death. Claims based on similar factual circumstances have succeeded and I would expect a court also to find in your favour.
It is less clear, however, what you would receive as a result. Until very recently there was “lively controversy” in the courts as to whether the starting point for determining the appropriate remedy was compensation for the loss suffered — for example, the additional wages you would have earned plus interest — or enforcement of the promise, for example the transfer of the farm and business to you in accordance with your expectation.
The Supreme Court this month ruled by a majority in Guest vs Guest that the second option was the correct approach. This means that, if the court finds that it was unfair for your parents to go back on their promise, it will proceed on the basis that to address that it should enforce the promise by transferring the farm to you.
While that is now confirmed as the guiding principle, the rules are flexible according to the individual circumstances of each case. The court will consider other factors in determining the appropriate remedy. These include whether your parents can actually transfer the farm to you or whether they have already sold it. It also includes practical considerations such as the implications of the transfer, for example in terms of tax consequences.
Then there is the unjustness factor. Would enforcement of the promise result in an unjust outcome for others, such as any siblings you have or your parents themselves? And finally there is proportionality. Does the detriment you suffered justify the proposed remedy?
Another factor that is key to your case is “accelerated receipt”. Your expectation was that you would inherit the farm on your parents’ death. If you are now to receive it (or some monetary equivalent of it), your award must be discounted to recognise the early fruition of their promise.
Try talking to your parents again but if you cannot reach an agreement with your parents, it will ultimately be the court that decides.”
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice.
I talk often about how many people would challenge a Will. See here
This illustrates the need for an estate and succession plan. See here
Let’s talk about your plans.