Wills, trusts and probate
Declaration of trust
Our solicitors are on hand to provide clarity and protection for co-owners in the event of a sale or separation
If a married couple splits up, the separation of their assets and finances would be dealt with by divorce proceedings. However, for unmarried couples there is no equivalent process, and without a declaration of trust each party could face a lengthy litigation process in recovering what is rightfully theirs.
The division of jointly owned property is the issue that frequently causes the biggest concern when unmarried couples separate. If there is a disagreement, it is possible to ask a court to determine their rights, but that will be time-consuming, costly, and very stressful.
The outcome of court proceedings will depend upon the unique facts of a particular case. However, the court will always hold a presumption of equality where there is joint ownership, unless there is clear evidence to the contrary.
Consequently, if there is no evidence of an agreement to own the property in unequal shares, the partner who contributes the most may ultimately lose out. Similarly, half of any contribution made by a parent may end up with their child’s ex-partner.
The benefits of a declaration of trust
To minimise the scope for a future disagreement unmarried couples should enter into a declaration of trust. This enables you to set out your respective shares in property and to recognise and protect the interests of your parents (if they’ve gifted you money). Ideally, it should be put in place at the time the property is purchased.
It is also advisable to use a declaration of trust to record an intention of equal ownership when unequal contributions are made to the purchase. This will ensure that the agreement is honoured if the relationship breaks down. Also, if the party who makes the bigger contribution dies or becomes incapable, those dealing with his/her estate will be bound by the declaration.
As a final word of caution, remember that unmarried couples should make a will, if they wish to confer any benefit upon one another on death. If a property is owned as joint tenants, then on death it will pass automatically to a surviving co-owner without the need for a will. However, in the absence of a will, an unmarried partner has no entitlement to the deceased’s individual assets or his/her share of joint assets held under a tenancy in common.
