The recent case of Dobson V Griffey saw an unmarried couple in court, to decide the ownership of a renovated farm held solely by one of the parties.
Ms Dobson argued that the farm had been purchased in Mr Griffey’s sole name, with the intention that they would both benefit from the property. As such, Ms Dobson argued that she invested monies in renovating the farm to establish an equestrian business. Ms Dobson therefore claimed that she was due a share of the farm following their later separation.
Based on the evidence put before the Court, the Judge did not agree with Ms Dobson and found that this had never been the intention of the couple when the farm was purchased and that she had not contributed enough to obtain an interest in the farm.
Whether the outcome would have been any different had the couple been married is a different matter. However, the case is a strong reminder that co-habitants, especially on death, can be left in a very vulnerable position.
For example, if Mr Griffey and Ms Dobson had not separated but instead Mr Griffey had died, what would Ms Dobson have received from his estate?
Well, if Mr Griffey left a Will benefitting Ms Dobson, she would have received whatever was stipulated in the Will. However, if he had not left a Will, then the law would have decided to whom his estate would pass, under the Intestacy Rules.
Currently under the Intestacy Rules, Ms Dobson, as an unmarried co-habitant, would have received no benefit from Mr Griffey’s estate. This is because the Intestacy Rules do not acknowledge co-habitants within the classes of beneficiary of an estate.
In such circumstances Ms Dobson could have brought a claim against Mr Griffey’s estate (provided they had lived together for at least 2 years) or argued that she had some proprietary right in the farm (as she did in the actual case heard by the Court). However, such claims are very costly and time consuming.
There are instances where co-habitants have been able to negotiate with the family members of the deceased who are befitting under the Intestacy Rules. This enables the Intestacy Rules to be varied so that the co-habiting partner receives some benefit from the estate. However, if the deceased has minor children who benefit under the Intestacy Rules, such a variation cannot be done without the consent of the court, which in such circumstances is often very difficult to obtain.
Co-habitants do not, however, necessarily need to rush to the altar. They should however ensure assets are held in the “correct names” from the start. In addition, if they are farming in partnership then a well drafted Partnership Agreement and Will can often ensure assets pass to the intended beneficiaries on death. However, as ever, this does not take into consideration the tax implications for unmarried couples who will not benefit from spouse exemption for Inheritance Tax purposes.
At Hay & Kilner, our experienced advisers in our Rural Team can assist in all matters relating to the preparation of Wills, Partnership Agreements and Inheritance Tax planning, as well as advising co-habitants who may not receive any benefit from an estate, or Executors and Administrators who may be faced by such claims.
For more information on any of the above or, how we can help you, please contact Alison Hall, or call 0191 232 8345.