Conveyancing Solicitors Dealing with Declarations of Trust/Trust Deeds in Dorset
Where two or more people hold a property in their joint names, it is necessary to decide how the two individual parties' interests are held.
There are various options...
Joint Tenants
This means that you hold the property as if you are one person. In the event of the death of either of you, the property passes entirely to the survivor leaving them free to do what they want with it.
Before deciding that this is the best option for you, you should consider your circumstances carefully. If either of you has a child from a previous relationship, you may want your share of the property to reach that child.
If you hold as joint tenants and are the first to die, your share of the property would automatically pass to your co-owner and if they subsequently fall out with your child then (even if the child had until your death appeared in their will), this can be changed – leaving your child without any interest in the property.
Tenants In Common
You may wish to consider holding property as tenants In common. This can be in equal shares (ie 50:50) or in unequal shares.
If you hold as tenants In common in equal shares then on the death of either one of you, your 50% share in the property will pass in accordance with your will – assuming you have made a will of course – or in accordance with the Laws of Intestacy where no will has been made.
This could lead to a sale being forced to release the 50% share of the equity of the property and the survivor being made homeless in consequence so it is important to make a will to ensure that the survivor has the ability to remain in the property for as long as they live should they so wish.
There may be times when you decide that a simple 50:50 ownership of your property is not appropriate and you would like to hold your property in unequal shares.
Declaration of Trust
There may be tax planning and or inheritance issues which would mean that instead of holding the property together under either of the above arrangements, a Declaration of Trust would be better for you.
You may also want to declare that a third party who is not on the title deeds at all has a financial interest in the property and again this would mean holding a Declaration of Trust to show the third party’s interest in the property.
Coles Miller can draw up an agreement tailor made for your circumstances to show what share holding each of you is entitled to. This can be as straightforward or as complicated as you want it to be.
You may be each putting in differing amounts at the outset of a purchase that you wish to safeguard as a percentage share in the overall value of the equity in the property.
Alternatively, you may have one party putting in a lump sum but the other contributing toward the mortgage throughout the holding which results in a constantly changing percentage value.
Get Expert Legal Help
Whatever the position, Coles Miller can help to draw up a Declaration of Trust from day one to reflect your intentions and to help prevent any subsequent dispute over entitlement later on.
Please note however that these documents can be complicated and take time to prepare and finalise. You will need to check with us first whether we can attend to this within any specific required timescale that you have.
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