Declarations of Trust and Joint Ownership of Property
Buying a property with another person is a common matter, but there can be pitfalls and problems associated with this scenario.
When the property is sold, how will the sale proceeds be divided? Do you want your share in the property to pass to your co-owner should you die, or would you want another person to benefit?
To deal with the first question, unless you and your co-owner are happy with a 50/50 split of the property, it is always best to have a written declaration of trust, setting out your respective shares in the property.
A declaration of trust can be drafted so that the sale proceeds of a property are divided according to the proportion of money that each buyer has put into the purchase, or it can ensure that if one buyer paid the deposit (for example) then they would get this returned to them first before the rest of the net proceeds of sale are dealt with. You can even have a declaration drafted to deal with the situation where the buyers make contributions to the property over time and the division of the sale proceeds can be amended accordingly.
As to what should happen to your share in the property when you die, you should always consider your will. If a declaration of trust is in place then the property will be held as tenants in common, which means your will (or lack of will) would determine what happens next. You should take legal advice to make or review your will to make sure that if the worst happens, your share in the property passes as you would wish.
For further advice on declarations of trusts or wills upon the purchase of joint property please contact a member of our private client team.