Neves Solicitors use this latest column to offer advice on the benefits of instructing a lawyer to draw up a declaration of trust.
There are currently 3.3 million cohabiting unmarried couples in England and Wales. Up until recently, the law has significantly favoured the traditional married couple in terms of inheritance, property and pension rights.
Nevertheless, following a Supreme Court ruling in June 2018, civil partnerships have now been extended to mixed-sex couples meaning that should a mixed-sex couple choose to enter into a civil partnership, greater legal protection is available to them.
This article is not to encourage any snap decision weddings or civil partnerships, but only to give advice on the courses of action that may be beneficial for any co-habiting couples reading who choose not opt into either arrangement.
Supposing you contributed 80% of the purchase price towards a property but it is held in jointly in you and your partner’s names.
There is a legal presumption that the property is owned in equal shares, meaning that if the property is sold and a dispute arises, the sale proceeds would also be split equally.
To avoid this unfair consequence, instruct your lawyer to draw up a declaration of trust. A declaration of trust is a legally binding document making clear the parties’ interests in the property.
A declaration of trust will record the differences in both of your contributions and state how the net sale proceeds are to be divided to reflect those contributions.
An alternative situation many of us find ourselves in is having to help our children onto the property ladder with their respective partners or friends.
You may make a contribution and it may be wise for you to ensure that upon sale, such a contribution will revert back to you.
A declaration of trust can ensure this. It can also regulate contributions to any existing mortgage and the general payments required for upkeep and maintenance of the house.
Whilst suggesting a declaration of trust is not the most romantic topic at the dinner table and whilst it will come at a small cost, it is certainly not as costly or as acrimonious as a fight in court, should that unlikely future event occur.
If you would like to set up a declaration of trust, please get in touch with Carole Hewett on 01908 304560.
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