Divorce and the Family Home
Family break-up is always complicated and when there is a property involved, things can get very complex indeed.
In principle, when a couple are cohabiting (not married or in a civil partnership) the property belongs as of right to whoever is shown on the deeds as the owner.
Where there are minor children, the court will put their interests first and will normally ensure that their accommodation needs are met until they reach the age of majority. The most common circumstance in which a specific arrangement is necessary to secure the accommodation needs of minor children is when the mother and children live in a property which is owned by the father. Such arrangements may well involve a settlement into trust with the trust capital (the property) reverting to the father when the youngest child reaches 18.
In some circumstances, the courts will conclude that there is a ‘constructive trust’, which arises as a result of the arrangements made by the couple. In such cases, it is necessary for the person claiming an interest in the property which is not the same as a legal interest to demonstrate this.
The courts in such cases will consider the intentions of the parties involved. When one party claims a share in the property, the court will first ask whether there was the intention to share the beneficial interest in the property. If the answer to that question is ‘yes’, then the court will decide, on the basis of the evidence, what the nature and proportions of the couple’s shares should be. Note that it must also be shown that the claimant relied on the common intention to own the property jointly to his or her detriment.
Factors which will help substantiate a claim to a beneficial interest in a property in these circumstances will include:
- making a contribution to the costs of purchase;
- making a contribution to the mortgage, rates etc.;
- making a non-financial contribution (such as working to renovate, improve or maintain the property); and
- making an indirect financial contribution (e.g. paying other household bills so that the other partner can pay the mortgage etc.).
Cohabitation can present particular problems and the decisions made are highly dependent on the available facts – which makes having a cohabitation agreement and documenting any agreements made regarding ownership of the property highly advisable.
While marriage revokes earlier wills, divorce does not, so revisiting your will on divorce is always a sensible idea.