I’m trying to help some clients with the preparation of new Wills but they have instructed a solicitor, simultaneously, to assist with a declaration of trust.
Their property is currently held as BJT and they would like to apportion their equitable interests 80:20. Their solicitor is telling them to just go ahead with the declaration of trust. Their son, a trainee solicitor, is saying that prior to the declaration of trust, the BJT must be severed by a severance of tenancy.
Which is correct or are they both possible ways of achieving what they are looking to achieve?
I would always advise the tenancy be properly severed when parties are doing a DOT. If it is not and one party dies the title would appear to pass to the joint owner under a right of survivorship if there is no restriction in place. If they are entering into a DOT then they should use a SEV and sever the tenancy.
Don’t get me wrong, I would still file SEV after the event to register a Form A restriction, but there is no need to have a separate severance notice/agreement prior to the same parties making a joint declaration of trust.
I usually drafted a DOT with clause 1 being a declaration that the parties hold the property as TICs, with the other co-owner also executing to signify acceptance. If the declarer did not wish to disclose the trust provisions to the co-owner then of course a notice would have to be given to them. Box 7 of SEV or Box 8 of RX1 provides for the various possibilities. Either should be submitted whether or not there is an extant form A restriction, for avoidance of doubt, but obviously to lodge one if in fact none is extant. The state of the Register is evidence but not conclusive evidence of equitable ownership, despite HMLR practice e.g. Box 10 of TR1 and their response to it being to then register a Form A in a relevant situation.