The reports of legal wrangling between Paul David and his daughter Audra Wamsteker are sad to read but do serve as a warning that good relationships can and do break down. As such, there is always merit in ensuring that any transactions of monetary value are carefully documented to avoid scope for argument in the future.

As any private client lawyer knows, families are complex and relationships are ever-changing. A perfectly harmonious family dynamic can be quickly changed by the death, divorce or marriage of one family member. Unfortunately, when things are going well, people do not often consider the possibility that things might go wrong or change in the future and fail to plan accordingly, but this case highlights the importance of obtaining legal advice and documenting intention at the time of transaction no matter how good the relationship is between the parties.

From the article, it appears that Mr David paid the deposits and made mortgage contributions to a number of properties that are held in his daughter's name but no declarations of trust were made at the time to record him as having a beneficial interest in the properties.  

It is not uncommon for families to work on an informal basis. Some do not see the need for a formal document, not wanting to incur additional legal costs or happy to trust the other family member to honour a common intention. In the case of an absolute gift, both parties often believe no documentation is necessary but this can be problematic if the donor subsequently alleges that it was not a gift after all. 

In cases such as this one, there are remedies such as imposing a constructive trust, available to the court if they decide in Mr David's favour. Remedies such as constructive trusts are useful, however, court proceedings are likely to be costly and time consuming, causing more stress for both parties and are unlikely to improve the relationship between the estranged father and daughter. The case does act as a warning to those in similar situations that prevention is better than cure.

For those with an interest in constructive trusts and the issues surrounding them, CLT has an upcoming webinar which you can pre-order now: Constructive Trusts and Proprietary Claims Webinar