The interplay between a Trust of Land Claim and an Inheritance Act Claim
We generally see a lot of cases where individuals do not agree with how the ownership of assets are split. There are two areas of law which can relate to this especially in respect of a property, which is generally the biggest asset someone owns.
There are ways in which a lawyer can help navigate these complicated areas of law. The two of the most common areas are:
- A trust of land claim, known as a ToLATA claim (short for Trusts of Land and Appointment of Trustees Act 1996) is where you exert a proprietary beneficial interest in a property. In layman’s terms this is where you may have a claim on a property because you gave money towards the purchase price or if you have been contributing to the upkeep and maintenance of the property. This can arise where the property is either legal owned solely by one party or jointly by more than one party. This type of claim is typically brought when both parties with an interest in the property are alive.
- An inheritance act claim (made under the Inheritance (Provision for Family and Dependents) Act 1975) is where you allege that no reasonable financial provision has been made for you from an estate. This can only be bought on the death of the relevant party you wish to claim against. Essentially this is where you contest a will or the estate.
The reason why there is a close link between the two is that the main asset of most estates will be a property, so in order for an estate to be administered the first question will be working out what interest the deceased had in the property and therefore what falls within the estate to be distributed to the beneficiaries.
A very important interplay between the two can be found in section 9 of the Inheritance Act which allows a party to ask the court as part of their inheritance act claim to claw back an interest which would normally have passed outside the estate by virtue of the principle of survivorship as the property was held as joint tenants (see our blog which gives more detail about the types of ownership here). A word of warning that to bring such an application under section 2 of the Inheritance Act Claim, it must be made within 6 months of the Grant of Probate. There is no discretion for the court to extend this time limit, unlike with an actual inheritance act claim.
Bhusate v Patel and others (2018) EWHC 2362 (Ch)
This was a case decided by the High Court in September 2018 which highlighted the relationship between the two types of claims.
What was the case about?
Mr Bhusate owned a property in Golders Green, London. He died without a Will in April 1990 and was survived by 6 children and Mrs Bhusate, his third wife. Probate was obtained in August 1991 but nothing further was done to progress the estate administration but Mrs Bhusate remained living in the property and the property remaining in the legal name of MR Bhusate. She issued a claim in November 2017.
Mrs Bhusate alleged in the alternatives that either:
a) She was the sole beneficial owner, or
b) She was the joint beneficial owner with the children, or
c) She is entitled to her statutory legacy and a capitalised life interest plus interest at 6% per annum since April 1990, or
d) She is entitled to seek reasonable financial provision from the estate (and seeks an extension of time for doing so)
The claims in respect of beneficial ownership was rejected as the court said she could not rely on the same facts for the different claims which required completely different intentions and evidence. The claim for her statutory legacy was statute barred (as the time limit for such claims was 12 years).
Her application for an extension of time for her inheritance act claim was also rejected given the considerable delay (nearly 30 years too late!).
The sad thing for Mrs Bhusate is that if she had administered the estate properly, she would have been entitled to a statutory legacy of £75,000 as well as a life interest in 50% of the balance of the estate. Instead, she got no inheritance, no interest in the property, and lost her home.
What does this mean for people in this situation?
You would normally bring these claims in tandem, but be mindful of the much more strict time limits for an inheritance act claim, and clearly if you succeed in your trust of land claim, then your inheritance act claim may fall away.
You need to be very clear about what the intention was in respect of the property rather than to plead all the alternatives.
Litigation can be costly, risky and time consuming, so you need the right specialist advice from the start before you embark on it .
Time is of the essence, don’t wait around, or do so at your own peril.