Is a promise to pass on assets to a loved one at a later date enough to make sure that it happens? A recent Scottish case looked at this very matter and decided that it was not.
The facts in this instance related to the death of Mrs Moir and a gift she had intended (a key point) to make of her home to her grandson. During Mrs Moir’s lifetime she made a typewritten note, signed in the presence of an independent witness, which stated:
“I promise to give him [her grandson] this house for many years because of the work he has done in looking after the property and the kindness that he has always shown to me.”
Mrs Moir documented this promise in 2002 and later made a Will in 2006 which did not refer to the earlier promise. Following her death, Mrs Moir’s executors did not accept the document as a binding promise as one that they had to fulfil despite the express intention to gift the property concerned. The grandson in turn raised a claim against the executors seeking to have the property transferred into his name or alternatively, an award of a financial sum in damages.
Just an intention. Not binding.
The judge in this case considered whether or not the statement was sufficient to amount to a promise (a binding obligation) in law. It was held that the writing did not constitute a promise (binding obligation) to complete the intended gift of the house to grandson as there was no disposal nor an immediate commitment to make a disposal of the property – “It was simply a statement of an intention at some indeterminate future point to dispose” of the property. It was therefore open for Mrs Moir to change her mind before finalising the gift. The result being that the house formed part of the estate to be distributed to the beneficiaries under Mrs Moir’s will and the grandson lost out.
Make your word your bond… and we can help
The moral of the story is that if you wish to pass on assets (particularly those significant in value) to your family, or friend or any other party, it is crucial that you seek the right advice to ensure that it is implemented, whether now or at a later date. This gives you peace of mind, provides clarity and precludes the potential for conflict in the future.
What should be remembered and can be very strategically useful in more complex cases where there is an intention to, for example, benefit one child rather than another (as you may have seen in a recent blog from us, Scottish “legal rights” give automatics entitlements under estates) is that binding obligations (contracts or promises) can be enforced against executors before the will is implemented. This is something in other recent case law, the Scottish courts have underlined is indeed good law.
This blog was written by Lindsay Watson – 0141 245 6217 or email@example.com
To find out more about binding obligations, lifetime gifts, estate planning and wills please get in touch.
For more on wills or disputes about wills and estates please contact your usual Brodies’ contact or any of the following:-
Alan Barr- 0131 656 0103 or firstname.lastname@example.org
Susanne Beveridge- 0131 656 0218 or email@example.com
Alan Eccles- 0141 245 6255 or firstname.lastname@example.org
Norman Kennedy- 0141 245 6265 or email@example.com
Mark Stewart- 01224 392 282 or firstname.lastname@example.org
On September 11, 2015