How To Protect Your Property With a Deed of Trust

In this video Ursula Rice explains how you can protect your share of your property using a Deed of Trust – particularly if you and your partner are not married.

No time to watch the video? Here’s the transcript:

Hello. Thank you for watching this video. It’s going to be about deeds of trust.

What is a deed of trust?

A deed of trust is a document which is formally executed as a deed, which means no money needs to change hands. That’s what makes it different to a contract. And it sets out the ownership of your property. Do you own fifty-fifty? Do you own a different percentage? Often it sets out what you will do if you don’t want to own the house with the other person who owns it and in fact just want to split and you would like the mechanics of how you might buy that person out or how you’re going to deal with estate agents actually written into the deed of trust. So it can be very detailed as well as very big picture.

The reason you need one is that if you are not married and you own a property with your other half together, and there’s two of you, if you don’t set out how you want to own the property, then what will happen is at the land registry, it will be registered as fifty-fifty. Now, that might work really well for you because actually, well, we both put equal deposits in. We both pay relatively equally to the mortgage or I pay the mortgage, but she pays all the bills. That’s fine. There’s nothing wrong with going fifty fifty. I think there might be something wrong with it if your mum and dad put in the first twenty thousand pounds as a gift to you, and their thoughts is that if you two split up what they’d really want is that twenty grand back or maybe that twenty thousand pounds plus any equity that has been made from that.

All of these things can be calculated.

They’d want that back first before the rest of the equity is split fifty-fifty. You can imagine that when people start arguing at the breakdown of a relationship, it’s really easy for stuff to get very heated. People start sending each other emails saying, well, you said that when we bought the house. People say, no, I never, that’s not what I meant. Well, everything’s changed. Now we have children.

So it’s very important if you want to protect your money that you’ve put into a house that you do protect it with a deed of trust.

What they tend to cost depends how complex they are but I would be surprised if they cost more than fifteen hundred pounds plus, that that sounds like a lot of money, I don’t argue that it isn’t, let me tell you that most Trusts of Land and Appointment of Trustees Act proceedings, which is what you do when you didn’t have a deed of trust and you are arguing about it in court, you will be paying north of fifty thousand pounds very quickly.

Why? Number one, you’re in civil. That means civil procedure rules apply. They’re very technical. They’re very difficult. And your solicitor is almost certainly going to say, I need a barrister right at the beginning to do a lot of the drafting.

Number two, if you don’t abide to the letter by the court rules, you could be punished in costs. Even worse, your whole claim might get struck out.

Number three, one of the reasons that it’s so difficult is these are very uncertain proceedings. If you lose those proceedings, you will pay the winner’s costs. Pretty sure you don’t want to be in that situation. So rolling back, why wouldn’t you protect your assets using a simple, simple agreement that’s written down by a lawyer unambiguously and everybody knows where they stand if you don’t stick together? Makes complete sense, right?

Deeds of trust. Let us know if you would like some advice on them. Thank you.