It is no secret that getting on the property ladder is an increasingly difficult task. Many first time buyers are looking to the bank of mum and dad (or other family members) when buying their property. This is often a significant sum of money, so what can you do to protect that sum on any future separation.
Most people will put in place a declaration of trust to ringfence the deposit on any future sale, and that is it. If nothing changes for the couple, the chances are the declaration of trust will be upheld on any future sale, as this is dealt with under property law, where an express trust is decisive.
However, what happens if the couple later marry. The existence of a declaration of trust may be a factor taken into account in any subsequent divorce, but it is unlikely to hold any significant weight.
It is important in these circumstances to ensure that you enter into a prenuptial agreement to mirror the terms, which is more likely to be upheld if it meets the following criteria:
- The parties have had independent legal advice, and understand the terms of the agreement
- There has been financial disclosure
- The prenuptial agreement has been signed at least 28 days before the wedding, to avoid any suggestion that a party entered into the agreement under duress.
- The agreement is fair.
Any prenuptial agreement cannot oust the jurisdiction of the court, and the Court will have to be satisfied that each party can meet their needs. However, for couples who have only got a declaration of trust, a prenuptial agreement is essential, to ensure that family wealth is protected.
Speak with our Family specialist Lauren Pilcher or read more information regarding our Family Team services.