Court settles family dispute over who should inherit house

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The High Court has settled a family dispute over who should inherit a house that had belonged to a man who died 17 years ago.

The court heard that the man, a grandfather, had purchased the property in 1994 when he separated from his partner and wished to provide for her.

He was then 73 years old and she was 53. In 2001, he gifted the property to one of his two daughters but stipulated that the partner could continue living there for the rest of her life.

After his death in 2002, the partner prepared an affidavit to assist his executor in discussions with the Inland Revenue about inheritance tax. Her evidence was that he had told her at the time of the purchase of the property: “I have bought it for you to live in for the rest of your life, but I am not giving it to you. It is to go to my grandchildren.

One of his four grandchildren argued that the words spoken in 1994 had created a life interest for the partner and a trust for the grandchildren afterwards. The partner died in 2014. The district judge held that the grandfather’s statement to her had not created a trust of the property in favour of the grandchildren.

The decision was upheld by the High Court. It held that there had to be clear evidence of an intention to create a trust for it to be valid.

The district judge had been entitled to find that there was no such clear intention and that no trust was created. The grandfather had never told anyone else about the trust; he had not told his solicitor or his daughters or his grandchildren.

He had acted inconsistently with the alleged trust by gifting the property to his daughter. It was clear from his letter at that time that he thought he was giving something of value to her, rather than making her a trustee of the property.

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There was no reason to create a trust in 1994. The partner was going to live in the house, but not own it. The natural meaning of the words used was simply to indicate that by the time of the partner’s death, his grandchildren were likely to be the inheritors.