If I Am Contributing More to Our Property, How Can I Reflect That in My Will?

INTRODUCTION

If you jointly own a property, it's quite common for both parties to contribute unequal portions, reflecting their current and fluctuating financial circumstances. These differences are usually reflected in varying mortgage payments or significant contributions to the household, such as property improvements which impact the property's value.

This article explains how you can ensure these fluctuating contributions can be accurately reflected in your Will.

CONTEXT: THE CONSEQUENCE OF DIFFERENT PROPERTY OWNERSHIP ARRANGEMENTS

Before we explore how unequal contributions to your jointly-owned property can be reflected In your Will, for context, we recommend you consult another article called "Why Would I Convert Property Ownership from Joint Tenants to Tenants in Common?"

In that article, we illustrate the key differences in how property affects estate planning. For summary:

• Under Joint Tenancy, the entire property is automatically passed to the surviving owner through the "Right of Survivorship," regardless of each individual's contributions or stipulations in a Will.

• This means your share of the property transfers to the surviving co-owner, even if your Will stipulates otherwise. Conversely, in a Tenants in Common arrangement relationship, you have the flexibility to specify precisely who inherits your share of the property.

• This is a vital aspect in cases of unequal contributions to the property.

ADDRESSING UNEQUAL PROPERTY CONTRIBUTIONS: DECLARATION OF TRUST

Whether you co-own your property as Joint Tenants or Tenants in Common, a Declaration of Trust can be a valuable tool in situations where one party contributes more financially to a property than another.

A Declaration of Trust specifies each co-owner's shareholding in the property and accurately records any additional investments made by each party in the future. This is a crucial document. Without it, you risk being "boxed in" to your respective shareholding in the property at the point of property purchase and any additional contributions you make will not be reflected.

Caution: Carry Out Regular Updates to Avoid Potential Errors

As part of your regular estate planning review, you should frequently update your Declaration of Trust to ensure minor errors like ticking the wrong box don't significantly impact how your contributions are recognised.

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