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Mothers and Daughters….

by Ridley&Hall in Inheritance & will disputes, Sarah Young, Trust disputes, Trusts posted March 15, 2023.
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With Mother’s Day not far away, the shops are full of gifts and cards. But some mother/daughter relationships can unravel spectacularly and even end up in court as a case currently before the Central London County Court shows.

Norma Gibbons transferred ownership of her flat to her daughter Dawn in 2004 for ‘inheritance tax reasons’. She lived in the flat, estimated now to be worth £600,000, for some 40 years before falling out with Dawn, allegedly after shouting at her young granddaughter. Now the relationship has broken down, Dawn is seeking to evict her 82 year old mother and to have sole possession of the flat.

Norma’s barrister reportedly said to the court:

“When transferring the property into her daughter’s name, she had an expectation to live there for the rest of her life…certainly she didn’t expect to be kicked out of her flat by her daughter, otherwise she wouldn’t have transferred it.”

My grandmother had a saying; “give a thing, take a thing, dance around the devil’s ring” –  meaning, don’t expect if you give something away, to be able to change your mind and get it back later.

The law has a slightly more nuanced approach however, and it is possible that Norma may be able to argue that the 2004 deal should be set aside and the flat put back in her name. The law that applies to this sort of situation is called “presumed undue influence”.

A similar case was decided in 2018. In that case, the claimant was Neville Paull. The defendant was his son, Bradley. In 2010 Neville transferred his home to Bradley. At the time, Neville and his partner, Linda, lived at the property. Neville argued that he only transferred the property on the basis that Bradley agreed he would ‘look after the property’ for him and allow him and Linda to remain in the property for their lifetime.

Neville was 67 years old at the time of the transaction and was frail and vulnerable.  Bradley said that his father wanted to transfer the property because he:

  • Wanted to ensure that no part of his property went to Linda’s children from an earlier relationship;
  • Wanted to avoid the property being sold by the local authority to pay care home fees; and
  • Wanted to avoid the payment of Inheritance Tax upon his death.

Neville later sought to have the transaction set aside on the grounds that Bradley had “unduly influenced” him to transfer ownership.

The ‘recipe’ for presumed undue influence is:-

  1. That ‘A’ placed trust and confidence in ‘B’, or that B ‘acquired ascendancy’ over A and
  2. The transaction is not ‘readily explicable’ by the relationship between the parties and ‘calls for an explanation’.

If those two ingredients are proved, then person B must argue against (‘rebut’) the presumption of undue influence.

For a court to decide whether a transaction ‘calls for an explanation’, the context of the gift must be considered and its general nature; The court will take into account:

  1. the nature and size of the gift or transaction, including its proportionality in relation to the donor’s assets and
  2. the extent to which the donor’s future needs are capable of being met out of his or her remaining assets. If the gift is out of all proportion to the kindness or services in question, the court will be suspicious.

In the Paull case, the court found that Neville had been unduly influenced by his son.

Bradley tried to rely on the fact that the solicitor acting in the transaction had advised Neville on the consequences of the transfer. But the judge found that the solicitor’s involvement was not enough – he had failed to ensure Neville truly understood the nature of the transaction and the fact that he could not change his mind later.

Each case is different and without knowing much more about the circumstances at the time Norma gave her flat to Dawn, it’s impossible to say whether she might succeed in a claim that she was the victim of undue influence. But it does seem very regrettable that a mother’s generous gift to her daughter should end up in court.

What is clear from the case law is that the courts will do their best to protect victims of financial abuse where evidence supports a claim. I suspect, sadly, that we will see many more cases in the future as we have a growing elderly population, living longer, in property that has often significantly increased in value. It bears repeating that one should always think carefully and take independent legal advice before transferring a significant asset to a loved one.

If you need legal help or advice, get in touch with our litigation team on our freephone 0800 8 60 62 65 or via our 24/7 live chat facility on our website.

Sarah Young

Sarah Young – Director & Solicitor

 

 

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