What happens without one
If you own a home in joint names with no written agreement, the starting point is that you own it equally, however much each of you paid. If it's in one name only, the other partner usually has to prove they were meant to have a share, which can take years and cost tens of thousands of pounds in legal fees.
Living together for a long time, or having children together, doesn't change this. Children's needs are dealt with separately, but the home itself is decided on property law.
What a declaration of trust does
It's a signed agreement that says how you own the home and how the money is divided if you sell or split up. Once it's signed properly, courts generally hold you both to it. It can only be overturned in narrow cases, such as fraud, a genuine mistake or one of you being pressured into signing.
It also makes you tenants in common, so each of you can leave your share in a will. Our guide to joint tenants and tenants in common explains the difference.
If you get married later
Marrying doesn't cancel a declaration of trust. It stays valid. But if you later divorce or dissolve a civil partnership, the court has wide powers to divide your property fairly between you, and it can depart from what the declaration says. The declaration will still be evidence of what you intended. If you want the split to survive a divorce, you need a prenuptial or postnuptial agreement as well, and legal advice.
Declaration of trust or cohabitation agreement?
A declaration of trust deals with the home. A cohabitation agreement covers everything else about living together: bills, savings, cars, pets and what happens to belongings if you separate. Many couples have both. If the home is the biggest thing you share, start with the declaration of trust.
Other things worth doing
Make wills. Under the intestacy rules an unmarried partner gets nothing, however long you've been together.
Check your life insurance would clear the mortgage if one of you died, and keep the bank statements showing who paid the deposit. You'll probably never need them.
Sources
- Stack v Dowden [2007] UKHL 17
- GOV.UK: Who can inherit if someone dies without a will
- GOV.UK: Joint property ownership