Past Behaviour Indicates Intent

A recent case illustrates the importance for cohabiting couples of giving careful consideration to property ownership and inheritance issues.

Ms Cattle had a relationship with her partner, Mr Evans, for many years and when he died she made a claim against his estate under the Inheritance (Provision for Family and Dependants) Act 1975.

When the couple met in 1990, Ms Cattle was living in a property which she owned subject only to a small mortgage. Mr Evans was in the process of divorcing his then wife. He moved in with Ms Cattle for a while and then bought his own property. She subsequently sold her property and bought another.

Although the couple became engaged, they never married. They split up in 1997, but subsequently resumed their relationship in 1999.

In 2002, Ms Cattle sold her property and bought another, again with a small mortgage.

In 2004, the couple bought a property in Spain, in their joint names, which needed a considerable amount of work. Their individual properties in England had been put on the market and when Mr Evans’ house was sold, the proceeds were spent on renovating the Spanish property and he went to live with Ms Cattle. She then sold her home and bought a smaller home for her two children to live in temporarily, the idea being that when they had found homes of their own, it would be rented out. The couple then moved to Spain, where Ms Cattle contributed a substantial sum towards the renovation costs.

The court concluded that the couple had each invested approximately £60-70,000 in the Spanish property. Eventually, after Mr Evans had inherited some money, they decided to sell the Spanish property and move back to Britain, where they found a suitable property in Wales.

Because Ms Cattle already had a house, the intention was to put the house in Wales in Mr Evans’ sole name, to avoid potential Capital Gains Tax issues. There were delays in completing the purchase of the Welsh property and, in the meantime, the Spanish property was sold and they split the proceeds equally. Eventually, the purchase of the Welsh property went ahead, using only funds from Mr Evans.

When Mr Evans was diagnosed with terminal cancer, he and Ms Cattle instructed solicitors to prepare wills for both of them. Under Mr Evans’ will, the house in Wales would pass to Ms Cattle and the rest of his estate would go to his two adult children. However, he never signed his will and died intestate.

Mr Evans' family argued that he never had any intention of executing the will, which was Ms Cattle's idea, and evidence was given that he intended to separate from her.

The court also heard that Ms Cattle had inherited £30,000 from her father, which she had transferred to her son and did not disclose to the court.

Ms Cattle claimed that she was entitled to a share in the property in Wales, because a constructive trust had arisen, and that she was entitled as a dependant to a share in Mr Evans’ estate. The court rejected the first claim, concluding that there had been no intention that the house in Wales would be jointly owned. The couple had kept their financial affairs separate at all times, except with regard to the Spanish property, and there was no indication that the property in Wales was to be treated differently.

However, the court did accept that no financial provision had been made for Ms Cattle and that reasonable provision should be made. Accordingly, an order was made that a property worth no more than £110,000 be purchased for her to live in. The property would be owned by the deceased's sons, however, with Ms Cattle required to keep it insured.

Contact Cathy Owen or Lucy Williams if you would like advice on any of the issues raised in this article.