Joint house purchase Deed of Trust

van_halen

Hello! I've been a lurker on this forum for ages but need some help regarding a house purchase I am making with my partner (and soon to be wife).

We're purchasing a house together, total value £250k. My partner is contributing £5k to the deposit and I am contributing £140k (a gift from my parents, which is essentially their inheritance). We will split the mortgage (of £105,000) 50:50 between us so the contributions to the house purchase will eventually be:

Me: £140k plus half of the mortgage (£52,500) = £192,500

Her: £5k plus half of the mortgage (£52,500) = £57,500.

I have asked the solicitor to write up a deed of trust to ensure that, should we split up (and I can't see it ever happening), that both our investments (and my parents inheritance) is protected.

The solicitors initial suggestion has been to write a simple declaration stating that, if we sell the house, we get our deposits back (£5k and £140k) and any additional value is split between is 50:50. I do not agree with this because my investment of £140k is not protected at all and will simply lose value.

My suggestion was going to be that we split the house into shares and apportion them according to our contribution, 77% from me and 23% from my partner.

My question is whether this is fair for her (it seems completely fair to me) Has anyone else been in a similar situation and if so what did you do?

Thank you.

Thrugelmir

van_halen wrote: »

I do not agree with this because my investment of £140k is not protected at all and will simply lose value.

Are you buying an investment or a home? Earlier in your post you said "should we split up (and I can't see it ever happening)". You are entering a joint relationship where everything is shared. Yet your post makes it sound like a business one. What happens if you have children later. Is the mortgage 50/50 still. If your wife no longer has income.

If you have children and afterwards the relationship breaks down. Then you are faced with a completely different set of circumstances.

Just personal observations. Declarations of trust are best kept as simple as possible. The solicitors suggestion is a good base point. Remember your wife should seek independent advice on the document as drafted before signing. As otherwise it'll be difficult to enforce. Should the need arise.

van_halen

Thrugelmir wrote: »

Are you buying an investment or a home? Earlier in your post you said "should we split up (and I can't see it ever happening)". You are entering a joint relationship where everything is shared. Yet your post makes it sound like a business one. What happens if you have children later. Is the mortgage 50/50 still. If your wife no longer has income.

If you have children and afterwards the relationship breaks down. Then you are faced with a completely different set of circumstances.

Just personal observations. Declarations of trust are best kept as simple as possible. The solicitors suggestion is a good base point. Remember your wife should seek independent advice on the document as drafted before signing. As otherwise it'll be difficult to enforce. Should the need arise.

Thank you for your response. I suppose the answer the that is both, however you're right in that I shouldn't be looking at it as an investment, but as a home for my me and my wife. For me, it's hard not to, since I never thought I'd ever see such a huge amount of money and I'd like to protect it for both my and my parents sake (since they've saved for so long).

Let_Us_See

So, you want your cake and to eat it! Have you explained your hypothesis to you partner/future wife, and does she agree with your reasoning? The Deed of Trust will protect both your deposits, but from there onwards shouldn't your finances be for the benefit of both? Not really a mortgage query and should perhaps be directed to an Agony Aunt.

AMILLIONDOLLARS

So you want to split the mortgage 50:50, but give her less of a return on her half!

And you call this love, LOL:rotfl:!!!

AMD

gazimboLover

Hi,

I was in the same position £50k from me, none from partner.

We had a deed drawn up stating should be sell the house I would get my £50k back.

I thought the same things as you - that £50k will be worth less than it is today so the % thing would be better for me IF we did split up.

But if your committed to the relationship then evetually What's yours is hers, hers is your etc...

I know relationships often end and if yours does at least you know you'll still have your initial deposit - even if it is worth less!

van_halen

AMILLIONDOLLARS wrote: »

So you want to split the mortgage 50:50, but give her less of a return on her half!

And you call this love, LOL:rotfl:!!!

AMD

Not sure if serious, but that's not exactly what I am proposing is it. Half of the mortgage doesn't buy her half of the house. She would get the same return on her investment as me. If it WERE a business transaction I would insist on the 23%, 77% shares because it's fair.

We had a discussion last night about it. She agrees with my reasoning and would agree to it, but I think we're going to keep things simple and just have an agreement that if we DID split, we'd get our initial desposits back.

Let_Us_See

van_halen wrote: »

If it WERE a business transaction I would insist on the 23%, 77% shares because it's fair.

But it is not, and never has been, a business transaction!

TBagpuss

The solicitor's suggestion has the merit of being simple, clear and something which won't reuire lots of arguments over the vlaue of the house if things ever do go wrong.

Bear in mind that if you were to divorce a court would not be bound by the declaration of trust, it would be one part of the evidence only. The longer you are together, the less weight it will have.

So it is reasonable to look at this as setting out what should happen if you were to split up in the relatively short term. Looked at in that way, having the straight capital back is not unreasonable, as you are not looking at a long term investment.

antrobus

TBagpuss wrote: »

The solicitor's suggestion has the merit of being simple, clear and something which won't reuire lots of arguments over the vlaue of the house if things ever do go wrong......

The solicitor's suggestion is more complicated and less clear, then the OP's suggestion of using a straightforward 77%-23% apportionment of the equity.

TBagpuss wrote: »

...Bear in mind that if you were to divorce a court would not be bound by the declaration of trust, it would be one part of the evidence only. The longer you are together, the less weight it will have.

If they were married, then when asked to write up a deed of trust the solicitor should have said 'don't bother'.

TBagpuss wrote: »

..So it is reasonable to look at this as setting out what should happen if you were to split up in the relatively short term. Looked at in that way, having the straight capital back is not unreasonable, as you are not looking at a long term investment.

If you are buying a house to live in, you are looking at a long term investment.

antrobus

van_halen wrote: »

...My question is whether this is fair for her (it seems completely fair to me) ....

In my opinion, your proposal is perfectly fair. But my opinion doesn't count, only your partner's does. If she's happy with it, then go ahead.

P.S. Your solicitor should act in accordance with the instructions they are given.