We own a property (no mortgage involved) in which my daughter, her partner and their three children live. We would like to transfer ownership of the property equally to the five of them, and since the 3 children are below the age of 18 we understand that a trust would have to be set up for their share in the property.
If at some stage in the future, the family decide to use the sale proceeds of the house to buy a more expensive property, (with both adults thus entering into a mortgage agreement) what is the position then with regard to the children, who would obviously not be contributing to the mortgage repayments but whose contribution to the purchase obviously appreciates as the value of the new house increases.
In other words, does their share of the old house value at the time of sale, ie one fifth of the sale price, remain static, or would that share be increased by future % changes in the overall value of the new house or would they continue to have some claim to one fifth of value of the new house which hardly seems fair as they won’t have been contributing to the mortgage repayments.
If at some stage in the future, the family decide to use the sale proceeds of the house to buy a more expensive property, (with both adults thus entering into a mortgage agreement) what is the position then with regard to the children, who would obviously not be contributing to the mortgage repayments but whose contribution to the purchase obviously appreciates as the value of the new house increases.
In other words, does their share of the old house value at the time of sale, ie one fifth of the sale price, remain static, or would that share be increased by future % changes in the overall value of the new house or would they continue to have some claim to one fifth of value of the new house which hardly seems fair as they won’t have been contributing to the mortgage repayments.
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