Informal arrangements within families are often a recipe for legal problems later on, as a recent case shows.
The circumstances that gave rise to the problem were a variant of the usual case in which a child builds a ‘granny flat’ for a parent or parents to move into. In this case, the son of a couple had paid a contribution to the construction of an extension to his parents’ house and then moved into the extension with his wife.
When his father died, the son claimed that he had acquired a 15 per cent interest in the property through his contribution, and a life interest in the remaining 85 per cent of the property, which was owned by his parents. The claim was made to reduce the value of the estate because his father's estate was insolvent.
However, in the absence of the appropriate paperwork to substantiate his claim, the court rejected his argument.
The moral of the story is that if you want to avoid future legal costs, delay, disputes and protect your interests, get the paperwork tidied away properly from day one.