Intestacy, trusts and beneficial ownership of property

Intestacy  – dying without a valid will – can cause all sorts of legal complications for your loved ones. In this case, the Court of Appeal had to consider the complex area of trusts, and the ownership of a property occupied by the deceased’s daughter, but owned jointly by the deceased and his second wife.

The Facts

The claimant, Juliette Wodzicki, lived in a property in London which was registered to her father, George, and to George’s second wife, Monique. Juliette had occupied the property with her children since it was purchased in 1988. She paid all the outgoings on the property. George visited but never lived in the property, and Monique had never been to the property by the time George died intestate in 2010. Monique sought possession of the property. Juliette counter-claimed that she was the sole beneficial owner of the property. She said that George and Monique had allowed her to live in the property for her life, and that George had promised to transfer the legal title to her once the loan taken out to purchase the property had been paid off. Monique did not accept that there had been any such promise.

The County Court found that Monique held the property on trust for Juliette and for herself. The extent of the ‘beneficial interests’ of each of them was to be determined at a later hearing. Juliette appealed this decision, but did not succeed.

The Court of Appeal held

• The County Court judge was entitled to make the finding that he had made
• The approach in Jones v Kernott which dealt with the ownership of a family home of a cohabiting couple who had subsequently separated, was not applicable in this case
• There was nothing to suggest that Monique had intended to make a gift of the property to Juliette, or that the parties were once close, as in the Jones v Kernott

Resulting Trusts and Constructive Trusts

The case involved a certain amount of analysis of whether the property should be held on a ‘resulting trust’ or a ‘constructive trust’. A resulting trust is designed to give effect to the intentions of the parties involved. The County Court judge found that George “intended his wife [Monique] to be the joint owner and never made known to her expressly or impliedly that his daughter [Juliette] was to be the sole owner.” A constructive trust, on the other hand, is imposed regardless of the intentions of the parties, to correct a situation where someone – in this case it would be Juliette – had acted to his or her detriment in the belief that in doing so they would gain a beneficial interest in a property. The County Court decided that this situation was one where a resulting trust was the correct approach. The Court of Appeal could not overturn that decision.

Proprietary Estoppel

Alongside the argument that the County Court should have found a constructive trust, Juliette also argued that she was in fact the owner of the property through the application of a principle known as ‘proprietary estoppel’. This concept shares some similarities with the constructive trust – it requires there to have been a promise or assurance which is relied upon by the claimant, to their detriment. ‘Detriment’ has a wide meaning. Juliette’s argument failed because, as a matter of fact, Monique did not know about the promise George had made to transfer the property to his daughter.

The importance of making a will

This case is another which serves to highlight the importance of making a will in the first place. Had George done so, he could have been clear about his intentions with regards to the ownership of the property. It also highlights the complex nature of the law as far as trusts and the beneficial ownership of property is concerned.

We regularly deal with issues arising from intestacy and trusts law – please get in touch if this is a situation you find yourself in. We offer a free claim assessment and can usually represent out clients under a no win no fee arrangement.