Making A Trust Deed
If you wish to be more specific about the way in which you and joint owner make provision about who is entitled to what from the property then we recommend that you set out all your wishes and intentions in the Deed of Trust.
We strongly recommend taking the time to have a deed of trust drawn upregulating your interests in the property and making sure there is total clarity as to who is entitled to what.
Without a Trust Deed to set out the intentions of the parties there will be no guarantee as to what might happen should there be a disagreement at a later stage. If, for example, there is a dispute then the Court may decide that a property should be split into 50/50 equal proportions when in actual fact this has never been an intention. If there is a dispute then there could be uncertainty as to who is entitled to what. A trust deed will prevent any arguments and any room for any possible claims based upon different views of what you each intended. If arguments do arise and the dispute goes to court then Judges are given broad discretion to decide which party gets how much. Such arguments are costly and the outcome is often uncertain. A deed of Trust prevents this.
Buying in the name of only one party
You should be aware that if the property is only purchased in one person’s sole name this does not preclude the existence of another person having an interest in that property.
If you intend that another person SHOULD have an interest in the property (even though the property is in your sole name) then we strongly advise that you should have a deed of trust which sets out that person’s interest and clearly makes provision for the interest or share that the other person is to benefit from.
If you do not want another person to have a share or interest in the property then it is important that you obtain full and detailed legal advice as to the ways in which another individual may gain an interest in your property or pursue a claim in respect of that property. For example, a person might gain an interest in the property by way of a Resulting Trust if they have contributed to the purchase of the property or significant repairs or renovations believing this entitles them to a share/interest. A person might gain interest if they have been led to believe that the property is also “theirs” and they can show that this was the “intention” when the house was purchased and they can claim a constructive trust.
Please be aware that cohabiting couples DO NOT gain any interest in each other’s property just because they live together – no matter how many years they are together. There is no such thing as “common law marriage” regardless of how long a couple cohabits. If a couple does not marry then there is no remedy for that couple when their relationship breaks down. Living together does not give rise to any special claims. However, there are circumstances where the arrangements during the years of cohabitation may lead a non-owning party to successfully claim an interest in a property by way of a trust.
The potential consequences of not making a Declaration of Trust at this time may include:-
- The possibility of a dispute at a future time;
- Becoming involved in litigation later on and incurring costs as a result;
- The possibility that the Court will divide the property in a way that is different from how you had intended.
- The loss of some, or all, of your financial contribution to be invested in the property.
If you are unsure, please telephone for further advice. We are more than happy to give additional specific advice as to your personal circumstances but please note that this is outside the conveyancing fee and additional charges will be made. (Please refer to our Terms and Conditions), but we can offer you a competitive fixed fee quotation before you decide to proceed further.