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 houseowners may find themselves having to buy back the child’s share at market value.
What if relations simply break down? Upsetting and frustrating as this will undoubtedly be, provided that the grandparents have not parted with a share of the house, they can ask the younger generation to leave, and/or they can sell the house.
Much more perilous dangers lurk where there is more than one child of the family: First, over time the resident child may come to see the family home as her own, particularly if as time goes by, the grandchildren have left home and the child sees herself as responsible for the grandparents. Second, if the grandparents’ wills have appointed the resident child as an executor, she may refuse to cooperate in the sale of the house so that the sale proceeds cannot be divided between all the children. The resident child’s co-operation is vital to the smooth administration of the estate because executors must act
unanimously. Worse, she may claim that her parents promised or agreed to give her the house in return for her looking after them during their old age. In the absence of a clear written agreement, the whole administration of the estate will have to stop while those claims are adjudicated through the courts at catastrophic expense.
Always consider the implications of intergenerational living before you plunge in and do seek legal advice if there is more than one child of the family. At the very least you may need to change your executors.
2. Co ownership of property as a solution to care provision Intergenerational family living is not the only cultural shift which has taken place over the last 50 years. With the upside of greater life expectancy comes the spectre of ill health and dependency in old age. Some unrelated people have decided to pool their resources and buy a house to occupy long term. “Resources” in this context include both cash and pastoral duties such as care.
Unlike the potentially disastrous grandparent/child and family home
scenario above, this sort of arrangement usually starts with the purchase of a property and so lawyers will be involved in the purchase. A written agreement should be considered with a pre- arranged exit path before the parties ever take up occupation.
What matters should such an agreement include? First, the parties must decide whose name will be recorded on the legal title to the property. The legal title is registered at the Land Registry and open to public
inspection. Second, the parties should record in a written “Declaration of Trust” how they want to fund the management of the property, divide the proceeds of sale and what happens if they disagree about anything.
Unlike the Land Registry, the Declaration of Trust is a private document. Here the parties record such things as share of running costs, capital repairs, improvements and most importantly, what is the procedure if one party wants out and the other wants to stay.
Finally, the private Declaration of Trust should include an Appendix in the parties’ own words setting out what drove them to enter into the sharing arrangements, how they envisage the living arrangements working, through to infirmity and old age and how the pastoral resources are to be contributed.
There are two reasons why the parties’ own Appendix to the Declaration of Trust is sensible. First, should there ever be a dispute about how the declaration of trust should be interpreted, the parties’ Appendix will greatly help a judge decide how to adjudicate a dispute as it will be clear what the parties intended at the material time. It will probably help resolve issues early enough to avoid the expense of court. Second, the very act of sitting down and thinking through what is proposed and how it will work will either cement the plan in the parties’ minds or bring them to realise that it is not a wise idea and can never work.
If there is something in this article which resonates with you, please book a free no obligation consultation with one of our legal team and remember that time spent in reconnaissance is seldom wasted.
  The very act of sitting down and thinking through what is proposed in a Declaration of Trust, and how it will work, will either cement a plan or break it
   Whatever stage in life, good advice is invaluable. We’d like to hear from you - contact Robin Jackson, left, or Matthew Boardman, right
18 Langton Place, Bury St Edmunds, Suffolk, IP33 1NE
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