If you are a cohabiting couple with a declaration of trust and are thinking of getting married, you should be aware of how it might be affected by any subsequent divorce proceedings.
Firstly, in a non-matrimonial context, courts have held that an express declaration of trust is conclusive evidence of interests under a trust of land and will be upheld by the court unless there is mistake, fraud or another factor that will invalidate the declaration, or it is set aside, varied or rectified by the court.
However, in a matrimonial context, the court has wide statutory and discretionary powers to make financial orders consequent on divorce, including a property adjustment order. The court will exercise its powers having regard to many factors, including the need to consider all of the circumstances of the case, with the first consideration being the welfare of a minor child of the family, who has not yet attained the age of 18. The court will also have regard to the concepts of needs, compensation and sharing when apply its powers.
Accordingly, while the court will have regard to any declaration of trust that you both may have executed prior to the marriage, this factor may well be outweighed, for example, by the welfare and housing needs of a minor child of the family.
Whether the court upholds a declaration of trust will ultimately depend on the factual circumstances of the case, including, but not limited to, whether the property in question was the family home and the overall value of assets to be divided between each of you.
As there is no 'one size fits all' outcome in financial remedy proceedings arising upon a divorce, as a cohabiting couple, you should consider reviewing your wills, financial and property arrangements prior to marriage in any event. Part of this review may include considering whether you wish to enter into a pre-nuptial or post-nuptial agreement in order to attempt to ring-fence certain assets from the sharing principle in any future divorce proceedings.
So, for you that have your wedding booked, or ladies considering popping the question this leap year, it is worth considering a review of your arrangements before your big day!
The Family and Private Client Departments at Short Richardson & Forth Solicitors can provide expert advice and support to cohabiting couples and/or those intending to marry, by drafting the relevant documentation, in order to ensure peace of mind before your wedding day.
Should you require any assistance, please contact Christine McVay, Head of the Family Department at Christine.email@example.com or Elizabeth Gibbison, Solicitor in the Private Client Department at firstname.lastname@example.org or call us on 0191 2320283.