Jack and Sarah are in a committed relationship , and are in the fortunate position of owning their own home. They could not have got there so fast without the help and trust of Sarah's parents.
Her parents were reassured by their planning, so they helped their daughter by giving her a substantial sum of money. Jack and Sarah's sensible attitude meant they didn't have to worry about their daughter's relationship breaking down and her losing control of the money they put into her property.
Although they hope that Sarah's relationship will work out, divorces are all too common, and Sarah alleviated their fears with the help of Cunningtons Family Law solicitors.
- If you own your own home and want to live with someone, but you also want to make sure they can’t make a claim against your home, contact us to get advice on a Cohabitation Agreement.
- If you are going to be buying a property with someone and you are putting more money into the property which you would like to protect, talk to us about a Declaration of Trust.
- And if you intend to get married soon but would like to protect your own assets and protect your financial contributions in the event of a divorce, speak to us about a Prenuptial Agreement.
Review the steps that Jack and Sarah have taken throughout their relationship that has given them - and will continue to give them - peace of mind:
Step One: Cohabitation Agreement
Step Two: Tenancy Options
Step Three: Pre-nuptial Agreement
5 years later, Jack and Sarah finally decide to take the plunge and get married. Sarah recently read an article about Prenuptial Agreements and wants to find out more about them, so she returns to her Family Law solicitor at Cunningtons.
We advise Sarah that, once she marries Jack, if they later get a divorce then the divorce courts will not automatically be bound by the terms of the Declaration of Trust, and they might decide that Jack should get more than 25% of the house.
We explain to Sarah that a Prenuptial Agreement is a formal Agreement entered into by a couple before they get married. Its intention is to set out very clearly what the parties have agreed will happen to their assets in the event of a future separation or divorce. It should deal with the following different types of assets:
Unlike a Will, a Prenuptial Agreement is not automatically binding on the Divorce Courts of England and Wales and nor is it automatically enforceable. Any Divorce Court has the power to depart from a Prenuptial Agreement if it feels that it is necessary to do so. Having said that, Prenuptial Agreements are usually upheld by the Court if:
Sarah discusses this with Jack and they agree to enter into a Prenuptial Agreement that says if they divorce, they will still hold the house 75/25 to Sarah, and they will each keep assets held in their sole names.
You can read the next stage of Sarah and Jack's journey next week.
If you need advice about Pre-nuptial Agreements contact Cunningtons Family Law department.
Two years later, Jack and Sarah are still happily together and Jack has saved £25,000.00 to put towards their next property. Sarah sells her property and receives net equity of £75,000.00. They buy a new property together for £200,000.00. Sarah puts in her £75,000.00 and Jack puts in his £25,000.00 as the deposit.
Sarah and Jack are advised by their conveyancer that there are a few different options as to how they can hold their new house:
Holding a home as Joint Tenants means if one of them dies, their share of the house automatically passes to the other. It also means there is a very strong presumption that they intend to hold the property on a 50/50 basis, regardless of who will be paying the mortgage and what they each put into the property.
Owning a property as Tenants in Common in equal shares means that if one of a couple dies, their share of the house will pass either under their will or under the rules of intestacy if they don’t have a will. Again it means they hold the property on a 50/50 basis, regardless on anything else.
Tenants in Common in unequal shares means that if one dies, their share of the house will pass either under their will or under the rules of intestacy if they don’t have a will. This means they can specify that they will not hold the property 50/50, but instead will hold the property in a way that recognises the fact that Sarah is putting more money into the property than Jack.
Sarah and Jack decide to go with Option 3 and become Tenants in Common in unequal shares.
Their conveyancer prepares a Declaration of Trust which specifically states that they hold the property 75% to Sarah and 25% to Jack. This means that if they split up, Sarah will receive 75% of the net equity and Jack will receive 25%.
Another option would have been to state that Sarah will always get the first £75,000.00, Jack will get the next £25,000.00 and the balance be divided equally between them. Unless Jack could prove that they had entered into a subsequent agreement to the contrary, Sarah’s money would be protected.
Read the next stage of Sarah and Jack's journey next week.
If you need advice about Cohabitation Agreements, Wills, or Conveyancing you don't have to wait a week - you can contact Cunningtons for advice on Family Law, Inheritance and Wills, and Conveyancing today.
Many couples nowadays choose to live together before they get married. What happens where the house is held in one party’s sole name? Does the other party obtain any rights to the property? What steps can be taken to protect each party? What if they buy a property together? What if they get married?
Follow Sarah and Jack’s journey to learn more about the options available to you if you want to protect your assets:
Sarah has been in a relationship with Jack for a year. Sarah’s parents gave her £50,000.00 to help her buy her own property which she purchased two years ago in her sole name.
Jack has been living with his parents. Sarah and Jack are ready to take the next step in their relationship and they want to live together. They have agreed that Jack will move into Sarah’s property and he will save up a deposit so that they can eventually sell Sarah’s house and buy a new property together.
Sarah’s parents are worried that Sarah may lose out financially if the relationship turns sour, so they have suggested she gets legal advice from a Family Law solicitor at Cunningtons so she can see what her options are. Sarah explains that she does want to live with Jack but she also wants to make sure he has no claim against her house if the relationship breaks down.
Although Jack says he wouldn’t try to make any claim against the property, Sarah is conscious that her parents helped her buy her house and she wants to protect their gift as much as possible.
We advise Sarah that she and Jack could both sign a Cohabitation Agreement which would set out very clearly in black and white that Jack will not acquire an interest in her property, even if he pays rent or contributes towards Sarah’s mortgage and bills.
The Cohabitation Agreement can also set out how they will pay their joint outgoings such as utility bills, credit card payments, food shopping etc.
What does Sarah do?
Sarah takes our advice and we prepare a Cohabitation Agreement which is signed by her and Jack. This means that if Sarah and Jack did separate and he tried to make a claim against her property, she could produce the Cohabitation Agreement as evidence that he does not have any rights to the property.
Follow Sarah and Jack's journey next week.
If you need advice about Cohabitation Agreements you don't have to wait a week - you can just contact Cunningtons' Family Law department today!
To answer this question, you firstly need to understand the difference between holding a property as joint tenants versus holding a property as tenants in common.
If you own a property as Tenant in Common, you may have also entered into a Trust Deed to say that you don’t own it in equal shares, and may instead have agreed to hold it so that one of you has a greater financial interest in the property to reflect the fact that owner contributed more to the cost of the property. If you own the property as joint tenants, and you then separate, you or your ex might decide to make sure your share of the property passes to another family member if you die, rather than passing to your ex. This is called “severing the joint tenancy. To do this, the person seeking to sever must serve the other owner with notice that they want to hold the property as tenants in common, and then apply to the Land Registry for them to amend the title deeds to show that the property is now as tenants in common.
It doesn’t mean you stop owning the property jointly, or that your respective financial interests have been changed or reduced in any way. It also doesn’t mean that you or your ex can secure debts against the property without each other’s consent. Once the severance has taken place, you should make or change your will to ensure your share of the property passes to your preferred beneficiary.
It’s always advisable to get legal advice from am qualified family lawyer if you are going through a relationship breakdown. Our family law team are experts in dealing with separations swiftly and amicably so call us today on 01245 264494 to book a free initial appointment and find out where you stand.