Help with a declaration of trust

markjamesallen

My daughter and her boyfriend are buying their first house. My daughter has £90,000 deposit and her boyfriend has no deposit. They both are teachers earning very similar salaries. They will pay the £270,000 mortgage and all house and living costs equally. They want to own the property equally and in the event of death they want the property to be left to the surviving owner.

If they sign a declaration of trust to protect my daughter's deposit they have been told by their solicitor that they cannot be joint tenants. This will mean that they must have two wills in order to leave their share of the property to the other. The cost will be in the region of £1,000 to arrange the two wills and the declaration of trust. I believe we are not protecting £90,000 as 50% is automatically protected by being joint tenants. Am I correct in thinking that the declaration of trust will protect a further £45,000 at a cost of £1,000, so a net protection of £44,000?

Is there a better solution? For example, should I as her father underwrite  £44,000 myself, in the very unlikely chance of this lovely man refusing to return the money to my daughter in the event of a separation?

Thank you

Emmia

They should have separate wills in any case, so two wills would always be required.

Do they have any plans to marry? As that will  invalidate their wills, and change the inheritance arrangements.

markjamesallen

Emmia said:

They should have separate wills in any case, so two wills would always be required.

Do they have any plans to marry? As that will  invalidate their wills, and change the inheritance arrangements.

Yes, they have plans to marry and start a family one day but no early plans to do so. 

youth_leader

Oh dear, I am sorry, that seems complicated!

I had told my 28 year old daughter that I would like her to have a Deed of Trust if she bought with her boyfriend ... but it now seems they have exactly the same amount of deposit.  

I hope you can find a good resolution.

Myci85

They don't have to have their wills written up by the solicitor handling the declaration of trust or house purchase. If their circumstances are straightforward, they are likely to be able to find cheaper wills. IIRC we had free wills drawn up when we took out life insurance, something else they may like to consider sorting. I think our solicitor charged us between £300-400 for a declaration of trust that basically says that if we were to sell the house, I would get my deposit back first and any remaining equity split 50:50.

markjamesallen

Myci85 said:

They don't have to have their wills written up by the solicitor handling the declaration of trust or house purchase. If their circumstances are straightforward, they are likely to be able to find cheaper wills. IIRC we had free wills drawn up when we took out life insurance, something else they may like to consider sorting. I think our solicitor charged us between £300-400 for a declaration of trust that basically says that if we were to sell the house, I would get my deposit back first and any remaining equity split 50:50.

I hadn’t thought of that. I have life insurance on their to do list so I’ll investigate free wills. 

Emmia

Because they're not planning to marry imminently, I'd be tempted to get some simple wills in place fairly quickly - mortgage providers are also often keen for insurance to be in place that pays off the mortgage in the event of the demise of the other.

Curiosily I personally think, that because of the money involved buying a property together is a bigger commitment than marriage - but children are the ultimate commitment that two people should make.