Declaration of Trust - valid after marriage?

hoopercw

My wife and I have been married for five years, but living together in a shared home for ten. My wife arranged for a Declaration of Trust on our shared property when we moved in (circa £90k).

I have been earning substantially more than my wife throughout our time together, and have paid 100% of the mortgage (around £90k principal and interest), plus all bills. My wife has paid for food, amounting to roughly to same as the bills.

My wife has two children who have lived with us for ten years.

We are having disagreements about the legal standing of the Declaration of Trust in our financial planning going forward. My wife maintains that she is entitled to £90k + 50% of any remaining equity in the marital home, whereas I believe that a 50/50 split of the total pot would be fairer. 

I realise this is moot considering that we are married, and that this would only really become an issue in the event of divorce (which I don't want), but I cannot shake the feeling that I have been conned (by my wife and her children). I am hoping someone can tell me what is right and fair so that we can write our respective wills correctly and move on.

Twixty3

Apparently a court can vary it or set it aside as they are kind of more intended for those not married .

They can also just leave it as it is if they feel it’s fair  to do so when taking all circumstances into account such as earnings, pensions etc. but it will be considered . 

https://www.harrowells.co.uk/site/blog/divorce-blog/does-marriage-affect-my-declaration-of-trust

Choirgrl

Does the Declaration of Trust say that the split is that she gets 90k and 50% of the remaining equity? If that’s what it says, then that is what she would be entitled to in a situation where proportion of ownership was being determined by the Trust.

As the previous poster says, if you were getting divorced and couldn’t agree a financial settlement between you the courts would look at your circumstances as a whole. Where it will be more relevant is if one of you dies. As you own the house as tenants in common in line with the Trust, you can each leave your portion however you choose, and as it stands her portion would be 90k more than yours.

Keep_pedalling

Choirgrl said:

Does the Declaration of Trust say that the split is that she gets 90k and 50% of the remaining equity? If that’s what it says, then that is what she would be entitled to in a situation where proportion of ownership was being determined by the Trust.

As the previous poster says, if you were getting divorced and couldn’t agree a financial settlement between you the courts would look at your circumstances as a whole. Where it will be more relevant is if one of you dies. As you own the house as tenants in common in line with the Trust, you can each leave your portion however you choose, and as it stands her portion would be 90k more than yours.

The house is not held in trust, the DoT just documents the proportion of ownership. Really it should be a mute point by now as we are talking about a marital asset that in the case of divorce might not be split as per the DoT. 

I don’t think it worth have arguing about while you have a stable marriage, after all no doubt the OP has better pension provision than his wife which is also counts as a marital asset. The OPs wife may also been keen to protect her children's inheritance if she meets an untimely end.

Do you both have wills in place?

Choirgrl

Keep_pedalling said:

The house is not held in trust, the DoT just documents the proportion of ownership. 

Apologies for not being clear, I wasn’t suggesting it was held in trust. But the DoT does presumably mean that they own it as tenants in common, rather than joint tenants, in the proportions specified in the DoT.

getmore4less

Choirgrl said:

Keep_pedalling said:

The house is not held in trust, the DoT just documents the proportion of ownership. 

Apologies for not being clear, I wasn’t suggesting it was held in trust. But the DoT does presumably mean that they own it as tenants in common, rather than joint tenants, in the proportions specified in the DoT.

All property with multiple owners is held as a trust.

The DOT describes how the beneficial interest is calculated.

The issue is does the DOT reflect reality many don't and are flawed when set up.

Not enough information to retrofit a sensible DOT onto the purchase that would account for the ongoing inputs.

Key information would be cash inputs at purchase and then the split of payments for any borrowing.

Exodi

Having been married for over 5 years, I'd imagine the DoT is largely meaningless now.

When it was written, did you include that it was 'in contemplation of marriage' (most wouldn't).

Else a reasonable person would expect the DoT to be made irrelevant by marriage.

I don't like commenting on others relationships, but this is a major red flag in my opinion.

74jax

hoopercw said:

My wife and I have been married for five years, but living together in a shared home for ten. My wife arranged for a Declaration of Trust on our shared property when we moved in (circa £90k).

I have been earning substantially more than my wife throughout our time together, and have paid 100% of the mortgage (around £90k principal and interest), plus all bills. My wife has paid for food, amounting to roughly to same as the bills.

My wife has two children who have lived with us for ten years.

We are having disagreements about the legal standing of the Declaration of Trust in our financial planning going forward. My wife maintains that she is entitled to £90k + 50% of any remaining equity in the marital home, whereas I believe that a 50/50 split of the total pot would be fairer. 

I realise this is moot considering that we are married, and that this would only really become an issue in the event of divorce (which I don't want), but I cannot shake the feeling that I have been conned (by my wife and her children). I am hoping someone can tell me what is right and fair so that we can write our respective wills correctly and move on.

I'm not sure how the DoT would alter what you put in your Will?  The DoT is in case of divorce, the Will is in case of death. 

When you are at the solicitors you can ask their thoughts and then get an actual legal opinion on the DoT, rather than here (nothing wrong with asking here at all, but as you will already be sat in front of the solicitor, you might as well ask). 

doodling

Hi,

74jax said:

[...]

I'm not sure how the DoT would alter what you put in your Will?  The DoT is in case of divorce, the Will is in case of death. 

When you are at the solicitors you can ask their thoughts and then get an actual legal opinion on the DoT, rather than here (nothing wrong with asking here at all, but as you will already be sat in front of the solicitor, you might as well ask). 

I suspect that the reverse is the case.  In the case of divorce the DoT will be largely ignored, depending on the length of the marriage whilst in case of death the DoT will be considered to reflect the ownership.

This is definitely one for a discussion with a solicitor.

Ultimately you might find out that your heirs would be better off if you divorced, but hopefully there are reasons why you don't want to do that....

TBagpuss

A declaration of trust made before you married would be a factor which a court could take into account if the two of you were to divorce, but it would not be binding, as the court has a pretty wide discretion and the overriding aim is to achieve a settlement which is fair to both of , tkaing into account a range of factors includingthings such as the legth of the marriage, your respective needs etc.

If she died and willed her sahre to someone other than you, then the presumption would be that she owned the share it said in the DoT,hpwever, you would potentially be entitled to make an application under the Inheritnace Act if, taken with the rest of the , this ment that she had failed to make reasonable provsion for you. In an inheritance act cliam where the calimiant is the wodow / widower then it's common for the court to consider what you might have been entitled to in a divorce, in order to determine what would be reasonable provision. 

However, as between you and your wife it sounds as though it may be time for you to have a broader discussion about your finaces and how your organise them. If you have been making higher finacial contributions to the mortgage or other outgoingd one otpion might be to look at reviewing the sitation and having a new agrement which perhaps reflects those contributions which you have made, as well as the initial one she made . For instnace, to set out that she gets £90K + 35% of the remaining equity and you get 65% of the remaining equity, if that would realistically reflect the differences in your contributions. 
But it sounds as though there are issues that go beyond just the housd, so some joint counselling or mediation support to help you to discuss your feelings and how they impact the fiancial arrangemernts might be helpful.