Tip 3: Consider making Wills
For this reason, Stuart and Gillian would be recommended to consider finding out who would inherit their share of the property if they were to die without leaving a Will and also consider making Wills. More about this below…
Back to title and shared ownership:
Option 2 – title is taken in joint names and to the survivor
Again this option is common. The title will be taken in the names of Stuart and Gillian in equal shares but the title will also provide that on the death of the first of them, the deceased persons share is automatically transferred to the survivor. So, if Stuart dies first his half share transfers automatically to Gillian, regardless of whether or not he makes a Will. The same applies if Gillian were to die first.
Option 3 – the title is taken in unequal shares
You will remember that in the above example Stuart is providing £5,000 towards the deposit and Gillian from her savings and the gift from her parents is providing £15,000 towards the deposit.
Now there is nothing to prevent the shares of ownership being split between you in whatever shares you agree on. But usually people tend to share ownership in equal shares.
But as in the example, it is possible for Stuart and Gillian to agree that account should be taken of the fact that Gillian is providing £15,000 towards the deposit and Stuart £5,000 towards the deposit. So, the title for example could be taken giving Gillian a 55% share and Stuart a 45% share.
Again, as with the Options 1 and 2 there is a choice to then be made between taking title in those shares full stop or taking title in those shares with the survivor-ship clause.
Tip 4: Consider entering into a Cohabitation Agreement
A Cohabitation Agreement is something similar to a Pre-Nuptial Agreement. This can be useful in dealing with such practical matters as:
- Detailing who provided what towards the deposit for the property
- Who is responsible for what share of the monthly mortgage payments
- How additional capital payments towards paying-off the mortgage are to be treated
- And how the proceeds from the sale are to be divided between you
Tip 5: More about making Wills
Living together is not treated the same way in law as being married. And so it is worthwhile considering making Wills to make sure that you provide for one another in the event of death.
Whilst the law (section 29 of the Family Law (Scotland) Act 2006 does allow a surviving cohabitant to make a financial claim on the estate of their deceased partner where the deceased partner died intestate (not leaving a Will) such claims must be made within a period of six months from the date of death. If the deceased partner died with a Will in place then the surviving partner is not able to make a claim.