Can a Declaration of Trust Stand in Matrimonial Homes?
Lisa PepperTable of Contents
Matrimonial Homes: Can A Declaration Of Trust Of Beneficial Ownership Stand?
Resolving issues relating to ownership of the former matrimonial home can be challenging, particularly in the absence of a consent order or a decision of the Judge. A recent case highlights the risks of the parties agreeing to change their beneficial ownership without backing it up with a formal agreement.
At Osbornes Law, the experienced financial remedies solicitors support clients in London and the surrounding regions in property and other financial matters on separation and divorce.
When a change in the legal ownership of property occurs, certain legal formalities must be complied with. But what’s the legal position where there is a purported change in beneficial ownership that is done informally?
- You may also be interested in: What Are Matrimonial Home Rights?,
- and Matrimonial vs Non-Matrimonial Assets
What’s the background?
[1Nilsson v Cynberg (2024 EWHC 2164 Ch]
The parties (H and W) purchased their property in 2001 as beneficial joint tenants (meaning they jointly owned the whole property and neither had a divisible share of the property).
H had an affair and the parties separated in 2009. They verbally agreed that W would keep the property as long as she would eventually leave it to their two children. W took on the mortgage repayments and all other expenses in relation to the property. She also paid substantial sums on home improvements. H did not contribute anything, having made clear he wanted no interest in the property.
They eventually divorced in March 2018; and around 18 months later H was declared bankrupt – at which point the matrimonial property became the subject of a dispute.
H’s trustees in bankruptcy took the view that H still had a beneficial share in the property, notwithstanding the agreement reached. They wanted an order for possession of the property and a subsequent sale. The impact on W and the children if this was to happen would be significant.
W argued that on the basis of their post-separation discussions, there was a ‘common intention constructive trust’ and/or a proprietary estoppel and she was therefore the sole beneficial owner.
The proprietary estoppel doctrine prevents someone from reneging on a promise concerning property. A key element that must be satisfied is that the party arguing the doctrine has relied on that promise to their detriment.
Declaration of trust
In the landmark 2007 decision in Stack v Dowden, the Judge stated that an express declaration of trust is conclusive unless varied by subsequent agreement or affected by proprietary estoppel. While this was helpful, it still left a level of uncertainty.
Here, the issue was whether ‘subsequent agreement’ could include a subsequent informal common intention constructive trust – and therefore, the informal agreement reached by the parties in this case.
The court ruled that it does, and clarified:
- An express declaration of trust (arising, in this case, under the original transfer deed) will be conclusive unless there is rectification or rescission – or varied by subsequent agreement or affected by proprietary estoppel
- A subsequent agreement is not limited to a formal agreement complying with legal formalities – it can include a common intention constructive trust
The Judge described this as “the sensible outcome”. The Trustees in bankruptcy failed in their claim and W’s enjoyment and ownership of the property could continue undisturbed.
As for proprietary estoppel, the court found W had suffered a detriment which was – contrary to the argument of the Trustees – far from minimal. It was in fact sufficient to show a proprietary estoppel.
The decision provides important clarification on the legal implications of informal discussions and agreements relating to matrimonial property. But it’s an abject lesson in demonstrating the importance of taking formal steps, such as a Financial Remedy consent order (on divorce), or a properly drafted and signed/witnessed declaration of trust, to document the change in beneficial ownership of the property.
How we can help
Expensive disputes such as the above can be avoided with specialist legal advice and representation from the experienced divorce and financial remedies solicitors at Osbornes Law.
For expert advice and representation, please contact us by:
- Filling in our online enquiry form below; or
- Calling us on 020 7485 8811
Share this article
Contact
Contact us today
For a free initial conversation call 020 7485 8811
Email us Send us an email and we’ll get back to you
Osbornes is a hugely impressive firm that offers strength and depth to its clients.
Lisa's substantial insight into financial disputes involving high-net-worth individuals is where her skills lie.
Yael Selig is bilingual in Spanish and English. She is the go-to person for divorce cases involving Gibraltar particularly, or Spain.
Lisa pepper heads the Mediation team and she is often mediating for high-net-worth individuals in both financial and private children matters.
The family law team at Osbornes is one of the strongest in London.
Osbornes‘ family team is headed up by Mark Freedman, a mediator and fighter who will get the job done on both complex financial matters and international children cases.
A market leader across public law, international cases, financial and children work.
Lisa Pepper is particularly recognised for her role as a mediator in complex cross-border disputes. Her practice also includes handling prenuptial agreements and issues arising from divorces. She is additionally skilled in Schedule 1 and other child arrangement matters.
Mark Freedman frequently takes on high-value financial and children proceedings that involve complex tax, trust and accounting issues.
"Andrew Watson is respected and tenacious in matrimonial finance. You would want him on your team."
"David Leadercrammer is such an experienced wonderful lawyer who you would want on the other side of your case. He’s sensible, pragmatic and hugely experienced in money and children cases."
Andrew secured me the best financial settlement for my claim. He is a credit to Osbornes Solicitors.
"Lisa Pepper was recommended to me as non-nonsense and able to help me with a difficult and confrontational divorce. She more than lived up to that – she was practical, collected and always available with a clear opinion and suggestions of how to move forwards. She also was open and helpful about costs and how to mitigate them"
"Mark Freedman is a very capable lawyer, renowned for not being a pushover and pushing his clients’ cases as much as he can, but will always talk sensibly about settlement. He is among the best – tenacious, good judgment and tactically aware."
"Mark Freedman is a dynamic and highly experienced family lawyer who fights extremely hard for his clients and is always in their corner, thus ensuring their loyalty and confidence. In a trial you would always want him on your side."
"She has impressed me as someone who fights my corner but also understands the importance of resolving issues without unnecessary escalation. She is calm and reassuring."
"Her mediation practice is exceptional; she is also a great solicitor and has a breadth of skill which is really useful."
"He is really experienced and wise. He has a lovely manner about him and clients feel safe with him."
"Jo Wescott is top notch and widely recognised as a rising star throughout the profession. She brings a winning combination of great judgement, an immense work ethic, and a relaxed and charming way with opponents and clients alike. Someone you want on your side”
"Osbornes is pre-eminent for family law in North London. Mark Freedman is a real rainmaker. He is an excellent lawyer and has a top-notch practice"
Mark Freedman is intelligent and personable and has a good selection of high-net work cases.
"Exceptional value for money. Highly competent and reasonably priced. Mark Freedman: one of the best in the field."
"Client-focused. Ready to fight the clients’ corner, but also ready where possible to steer client from unnecessary dispute. Mark Freedman – very experienced, with good instinct for the eventual result. Clients love him and he thinks ahead and directs the client to the best result for the client."
Mark Freedman is a serious player. A fearless family law litigator, who protects his clients’ interests passionately.
Breadth of knowledge and willingness to go the extra mile is what makes it stand out. Mark Freedman – devoted to his clients
Mark Freedman frequently takes on high-value financial and children proceedings that involve complex tax, trust and accounting issues. Sources praise the "tenacity and common sense" he brings to challenging disputes.
"Mark is very experienced, competent, good with clients and takes a sensible approach to cases. He knows exactly what he's doing."
"An exceptional outfit. They take on difficult cases, fight hard and win."
"The team frequently deals with cross-border estates for high–net-worth individuals."
"Mark Freedman is a real heavyweight litigator who has dealt with some very significant cases."
"Mark Freedman boxes clever, keeps his powder dry and when it comes to the end game he negotiates a really good deal."
"Mark Freedman has a specific focus on high-net-worth divorces and finance cases where there are overseas assets and trusts."
"Lisa Pepper somehow manages to get parties to settle on matters where there isn’t much hope to start out with."
"Well-regarded family practice assisting clients with substantial matrimonial disputes and sensitive children proceedings."
"Mark Freedman draws acclaim for his work in high net worth divorce cases, including those involving company structures, family trusts and overseas assets."
"He never gives up. He fights for you to the end and has boundless energy."
Mark Freedman advises high-net-worth clients and knows his stuff.
Highly regarded for his experience as a litigation and mediation expertise, Mark Freedman is tenacious and determined. Clients really feel that he is fighting their corner.
Andrew handled a very complex, 3 year legal battle for me, with a tremendous amount of patience and professionalism. He is very approachable, always kept me up to date, by phone and e-mail, and responded very quickly to my queries with excellent advice, sound strategic thinking and strong letters to put the other side under pressure. With top contacts for barristers, joint experts and mediation.
[The Family Law department] handles significant matrimonial finance cases and complex nuptial agreements. Respected for its expertise in cross-border children law matters.
Mark Freedman represents high net worth clients in complex financial disputes. Sources say that "he's a determined negotiator who'll always do the very best for his clients.
"Mark Freedman receives a lot of instructions from clients based abroad, often relating to complex divorce proceedings. Sources say: “His main strengths are his enthusiastic passion for the job in hand and his total dedication to his clients.”
Related InsightsVIEW ALL
- 4.11.2024
Anglo-French Divorce: Jurisdiction Guide
Anglo-French Divorce: which jurisdiction is right for you? It has been a year since we launched our Anglo-French department in...
Read more - 29.10.2024
Economic Disadvantage in Divorce: Can You Be Compensated?
Giving Up High Earnings: Can A Party Be Compensated For Economic Disadvantage? In financial remedies cases, the fact that one...
Read more - 28.10.2024
What Are Matrimonial Home Rights?
How can Matrimonial Home Rights protect your family’s future? When a couple is married or in a civil partnership,...
Read more - 23.10.2024
When Abusive Behaviour Affects Divorce Financial Relief
When is Abusive Behaviour Relevant To Financial Relief on Divorce? Domestic violence and other abusive behaviours are a contributing factor...
Read more - 1.10.2024
Borrowing Money for Legal Fees in Divorce
What if I can’t afford a lawyer for my divorce? When navigating a divorce, it is widely understood that...
Read more - 27.9.2024
Navigating Divorce, Child Arrangements, and the Jewish Festivals:...
Going through a divorce is challenging enough, but when you’re a Jewish couple with differing levels of religious observance,...
Read more - 25.9.2024
Who Pays the Debts After Divorce?
Am I liable for my husband’s debts if we are separated? Debt is a significant source of stress for...
Read more - 25.9.2024
What Happens to Savings & Investments in Divorce?
Is my spouse entitled to my savings and investments if we divorce? During the divorce process, both parties should exchange...
Read more - 23.9.2024
International footballer fails to comply with financial disclosure
UD v TQ: The importance of complying with financial disclosure Recent divorce case involving an unnamed international footballer is a...
Read more - 20.9.2024
What is a Pension Attachment Order?
Guide to Pension Attachment Orders Pensions are quite often valuable assets in a marriage. In some cases, they can be...
Read more - 6.9.2024
Uncontested Divorce
What is an Uncontested Divorce? Since no-fault divorces were introduced on 6 April 2022, respondents in divorce proceedings no longer have the...
Read more - 5.9.2024
Legal Separation vs Divorce
Legal Separation Versus Divorce: What Are Your Options? Divorce is not the only option when a marriage breaks down. Some...
Read more - 27.8.2024
Pension Sharing Orders
Pension Sharing in Divorce With so many things to consider when dividing up your finances during a divorce or dissolution...
Read more - 20.8.2024
What is pension offsetting?
In this article, we will explore the concept of pension offsetting and how it can play a crucial role in...
Read more - 20.8.2024
Do You Have to Divorce in the Country...
How to divorce if you married abroad People choose to get married abroad for various reasons. Some couples want an...
Read more - 12.8.2024
NA v LA [2024] EWFC 113: Judge Orders Non-Court Dispute...
Financial Claims: Judges Can Order Parties To Attempt Non-Court Dispute Resolution As was expected, the court has been quick to...
Read more - 8.8.2024
Wife’s Award Increased Due to Failure To...
Understanding the Impact of Changed Circumstances on Prenuptial Agreements Prenuptial agreements have become the norm where a husband or wife...
Read more - 5.8.2024
Why Did Lauryn Goodman Take Kyle Walker to...
Introduction to the case After a judge took the unusual step of making his judgement public, we’re starting to...
Read more - 1.8.2024
Standish v Standish: Court of Appeal Decision on...
Court of Appeal reduces wife’s divorce award by £20million Dealing with financial matters on divorce can be complex. And...
Read more - 1.8.2024
Matrimonial vs Non-Matrimonial Assets
Matrimonial vs Non-Matrimonial Assets in Divorce During a divorce, people often make the mistake of assuming that everything they own...
Read more - 1.8.2024
What is a Periodical Payments Order?
Periodical Payments Orders in Divorce Throughout the process of a divorce or when unmarried couples with children split up, there...
Read more - 1.8.2024
What is a Lump Sum Order?
Lump Sum Orders in Divorce When a relationship breaks down, as well as legally ending the marriage through a no-fault...
Read more - 25.7.2024
What is a Property Adjustment Order?
Property Adjustment Orders in Divorce As part of the divorce process, separated couples must decide how they are going to...
Read more - 11.7.2024
Unmarried With Children and Splitting Up
Unmarried with Children? What are your Financial Rights? Know Your Financial Rights Under Schedule One Children Act 1989 A claim under...
Read more