If you include ‘trust clauses’ in your Wills you will be advised to own your home as ‘tenants in common’ (as opposed to joint tenants) which will help to protect part if it from care home fees in the future, and other risks, see the 6 basic problems page.
If you are unmarried, whether you’re on your first or subsequent relationships, the law will see you as equal owners where the property is jointly owned, so if you split up you will most likely get 50%, regardless of whether you personally put more money in than your partner. If you die before your partner, your own children could very quickly and easily be disinherited because the other ‘joint owner’ would automatically receive your share – a chilling thought.
So if you hold the house as tenants in common instead, whatever the monetary amounts you put in as individuals can be reflected in it, say 70% and 30%. On death, you are now permitted to leave your exact share to whomever you wish through your Will. You could grant your partner ‘a life or term interest’ in your share so they can continue living there, otherwise the house may have to be sold, forcing them to find somewhere else to live.
Buying property is usually the single most important financial transaction most of us make, so you should take the greatest care and get your mind focused on the size and fate of the each person’s respective share – on buying it, or if you separate or on death or incapacity. These things happen, and whilst no one really wants to discuss what’s going to happen if you fall out (and so on) it is clearly better to do so whilst ‘you can talk about it’ amicably, rather than to allow the legal profession to earn handsomely from your misfortune and litigation, and decide for you.
So in your ‘declaration of trust’ agreement you should consider including the following conditions; agree that one party can buy the other out at current market value, how this right can be revoked and how you are to determine the value. How the net sale proceeds are to be determined after deducting any mortgage and selling fees. How the net proceeds are to be shared out, possibly reflecting the non-equal shares originally invested and who has paid the mortgage and bills during the ownership period. What should happen if the property falls into negative equity, and so on… this list is not exhaustive.