A Declaration of Trust is a document drawn by co-habiting couples that records what they have agreed regarding their financial arrangements, both during their relationship and if they ever separate.
If you need advice about a Declaration of Trust, our solicitors have the specialist knowledge to deliver expert advice and help you take the next steps to protect your interests. Our Family Law, Wills, Trusts and Estates, and Residential Property teams can advise unmarried couples on any legal rights they may or may not have based on their specific circumstances. We can clarify the legal ownership of assets and finances, as well as steps you can take to protect your own interests or draft an agreement between unmarried partners to help manage assets and finances.
You may also wish to consider a Cohabitation Agreement or Living Together Agreement, which covers a wider range of financial and personal matters for cohabiting couples, including property, finances, and day-to-day arrangements and what should happen in various eventualities, both during their relationship and if they ever separate. You can find out more about Cohabitation Agreements here.
For a transparent quote, please contact our Declaration of Trust solicitors, lawyers in Lower Earley, Reading on T: 0118 975 6622 or Henley-on-Thames on T: 01491 570 900, complete our website form below.
A Declaration of Trust is a legally binding document that can be drawn by co-habiting couples who have a joint interest in a property. It outlines how a property is owned and how the proceeds of a sale will be divided should a property need to be sold.
If a cohabitating couple separate and property is owned between them, or one party is the sole owner of a property and the other party wants to claim an interest in it, a dispute may arise as to what the respective parties are entitled to. If a dispute escalates and goes to Court, a Declaration of Trust will outline to the Court what the common interest was of the parties at the time the property was acquired, and how that has evolved (if at all) over time.
If the couple bought a property together, and one of them dies, they would usually share ownership as either joint tenants (where ownership passes to the surviving partner) or tenants-in-common, where each partner’s share can be left to someone else in a Will.
Unmarried partners are not automatically entitled to a share of their partner’s assets, such as the flat or house they share as a home, even if they’ve lived together for many years.
If a person has lived in a property owned by their partner, the owner will retain their control over the property, and they will have to move out if the relationship ends.
However, a person could potentially claim a beneficial interest in jointly held property if they can prove they significantly contributed to it financially (e.g., mortgage payments, money for renovations).
Non-married co-habiting couples do not automatically have inheritance rights if their partner dies without a Will.
However, if the surviving person was financially dependent on their partner or had been in a relationship with them and they had lived together for at least two years, they may be able to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975. Any claims for financial provision must be made within six months, usually from the time the Grant of Probate was given.
The Court will make a decision regarding any claim under the Act and will take numerous factors into consideration whilst deciding if a) a claim is valid and b) what amount of provision would be reasonable. These factors include:
If there is a valid Will and the unmarried partner has been named as a beneficiary, they will be able to inherit based on the terms specified, but they will not benefit from the same inheritance tax benefits as married couples. Married couples can transfer assets tax-free between them if one of them dies, but unmarried couples must pay inheritance tax on any portion of an estate exceeding the nil rate band, which at the time of writing is £325,000. Any assets over this figure will be taxed at 40%.
If the couple bought a property together, they would usually share ownership as either joint tenants (where ownership passes to the surviving partner) or tenants-in-common, where each partner’s share can be left to someone else in a Will.
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