A Question of Trust?
Did you pay a larger share of the purchase price with someone else when you purchased a property? Do you pay more of the mortgage? Did you pay the deposit when your child purchased a property? If so, is your interest in the property protected? Will there be problems later if you can’t agree about this?
When a property is bought or owned by more than one person, legally the property is purchased by the buyers on trust, usually holding it for themselves, but they could be holding the property on trust for others.
If two (or more) people purchase a property as Joint Tenants, then upon the death of any party the property will automatically go to the surviving owner(s). This happens whether a Will is made or not. You cannot leave your share in the property by Will to somebody else. Each individual is deemed to own an equal share in the equity of the property regardless of contribution to purchase price, mortgage or other payments.
The other method of holding property is as Tenants in Common, where each owner has separate and distinct shares in the property. Upon the death of one of them, the surviving owner or owners would retain his or her own share in the property whilst the other share would pass under the Will of the one who died. Unless he or she is left the share of the one who died by the Will, the surviving owner is not the owner of the whole property.
If you paid different shares or intend to pay different amounts in mortgage payments or if you paid the deposit for your children, then you should be holding the property as Tenants in Common and you should have a Declaration of Trust. This can be a fairly simple document setting out the shares each owner has and also allowing for what will happen if one owner wants to sell. This Declaration of Trust can be done at any time, provided all owners are in agreement, and will avoid problems at a later date. It is also essential that Tenants in Common make Wills in order to ensure the shares pass in accordance with their wishes.
If you would like to know more about this with regard to any property you own or intend to buy, please contact Emma Moore. If you would like to make or update your will please contact Stuart Bailey on sbailey@cheyneygoulding.co.uk.