Deed of Trust

lpp1980

I will probably contact a solicitor at some point. Wondered if anyone has expert knowledge on 'deeds of trust'?

I bought my property in December 2010 for £136k. I took out a small mortgage of £86k after placing down a £50k deposit. I was very fortunate to inherit some money from my uncle (£35k) and had around £15k of my own savings. The mortgage is solely in my name (and all the household bills).

In January 2011 my girlfriend moved in. She works full-time and wasn't comfortable not paying her way. She set-up a standing order and decided to pay me £250 a month. In fairness it wouldn't cover all my bills, let alone mortgage, but I appreciate her wanting to contribute. I agreed to this and keep a rent book of all the payments.

In January 2012 we became engaged and my mother mentioned to me about protecting my interests. Don't get me wrong, she's very fond of my fiance, but went through a messy separation once. She suggested I look at arranging a 'deed of trust' to protect my money and avoid any potential hassle. I hadn't considered it before, but maybe it’s the sensible thing to do.

I mentioned it my fiance and she's surprisingly not bothered. Now I assume the best agreement is one where my £50k deposit and any equity is protected, then we split any further equity 50-50 from date we get married?

Does this sound right, or am I all wrong?

Annisele

It sounds as though you're after a pre-nup rather than a deed of trust - but I think you're right, and you should see a solicitor. Deeds of trust tend to be drawn up for unmarried people who are both on the deeds. Pre-nups aren't necessarily enforceable.

If you marry and then divorce, the starting position will be that all of your assets will be put into a joint pot and then split 50/50. There are lots of things that could modify that starting position - for example, a short marriage, or having children.

Kynthia

Are you wanting to protect your financial interests until you are married or once you are married? I too thought that Deeds of Trust were for unmarried people as once you were married your assets were treated as jointly owned, however I do not know this for sure.

I personally think that unless you are protecting a personal/family business or a significant inheritance that you wouldn't want split up outside of the family should you divorce, that you enter a marriage willing to become 'one' financially and legally. However that is up to you and your fiancee.

sirmosh

Once you marry a deed of trust won't be a great deal of use and when it comes to marriage any legal agreements can often get thrown out the window. Unless her name is also on the deed I don't think you would even need anything to cover you. In fact since she's paying less than the minimum taxable amount under the rent-a-room scheme you can just say she's paying you £250 each month and not have to pay tax on it.

72clg

When I got my deed of trust put in place, my wife and I had already been married for a year. Harsh I know but I already had previously been married and kept the house, so the last thing I wanted was to lose everything in case this marriage didn't work (6 years on its still going strong). Our deal was I get back all the deposit I put on our new house and then any profit goes 50/50. Unless my solicitor got it wrong and ripped me off?

deprivedofsleep

Hi! definitely speak to solicitor.

I am not an expert, but my partner and I have spoken to our solicitors re joint mortgages and joint deeds (as entering into one with partner), so not sure if this will help or what will be relevant...

from my understanding we can choose either to have a beneficial joint tenancy agreement (50/50 or if one of us dies the property automatically passes onto the surviving partner) or a tennancy in common agreement where parties own certain proportions of the property (eg 70/30, but where one of the parties die that person's share is not automatically passed on to the remaining party -it forms part of his/her estate/ passed on as per will).

the solicitors also mentioned an agreement along with a tennancy in common that a deed of trust can be put into place where we could protect our deposit amounts, but we had already agreed that we are splitting everything 50/50 as we are putting the same amount of deposits down, so that this wasn't applicable to us.

also we are not married nor do we plan on it so i don't know what impact the above agreements would have on that. one thing's for sure you cannot have both names on the deed of a property and only have one name on the mortgage, so for now it sounds like the property is yours, but don't hold me to that. it's worth speaking to solicitors to protect your finances, and it's a horrible thing to say or think about, but just in case...

Lovelyjoolz

You need proper legal advice.

As far as I am aware, you can have all the Deeds of Trust or Wills or Pre-nups you like, but once you are married, all bets are off. Pre-nups are not legally enforceable in the UK. Wills are fairly easily overturned by next-of-kin if they are short changed and Deeds of Trust are irrelevant after marriage.

In short, the only person who can find you a cast-iron way of preventing your wife from inheriting from you, or taking you to the cleaners in the event of divorce, is a solicitor. And really, if a solicitor had found a way to do that, then they would be extremely rich and probably world famous.

Then again, if you do not want to share all your worldly goods with your wife, perhaps marriage is not for you?

xylophone

http://www.edwardsduthie.com/legal-ownership-of-the-home.html
http://divorce.moneyadviceservice.org.uk/living-arrangements/married-couples/different-types-of-ownership.html
might be worth a look.