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I am very sorry to read of the above and I imagine what a difficult position it must be. I will certainly try to clarify your options.
thank you. It is open to your wife to disclaim her interest in the trust. She cannot disclaim part of her interest-it is a question of all or nothing but from what you say, this concern her. It is not immediately apparent to me what the benefit to her would be in doing so. As a beneficiary of the trust, she is not liable mortgage and therefore it is a question of simply taking any benefit of equity that happens to be in the property. Clearly if the property is presently negative equity, there is no particular benefit but subject to property prices, that may not always be the case.
nevertheless, if your wife is determined to proceed in the above manner, she would need to consider signing a deed of disclaimer. normally you would need to appoint a solicitor to prepare this for you. It may be that you would be able to find a precedent online though deeds are not readily available as a rule.
It does not follow that if she disclaims your interest, it will automatically fall to the trustee in bankruptcy as they also have the option to disclaim but the house in terms of equity to the extent there is any, would no longer belong to either of you if she disclaims her interest. If the houses nevertheless in your legal name, then she can exercise matrimonial home rights but the trustee in bankruptcy can apply to court for an order for sale if they have not disclaimed their interest even if your wife exercises matrimonial homes rights and it will be for a court to decide in this respect whether to grant such an order where they will attempt to balance the interests of your wife and potential creditors
I do not follow the advantage. As things stand, unless the trust itself can be challenged under the insolvency act because it was made within the last five years, your wife already owns the property. it is not clear to me the advantage of disclaiming for the chance to potentially buyback in the future what she already owns
Is your wife at risk of being made bankrupt too?
my apologies. I have appreciated your wife is also a risk of bankruptcy. If this is what is motivating her concern in respect of the trust, this begins to make a degree of sense though disclaiming her interest in the trust would not succeed because a trustee in bankruptcy if she were made bankrupt can apply to set aside any gifts or disclaimers she made prior to the bankruptcy. Accordingly it seems to me that it would have limited purpose
If there is no equity there is clearly no risk of a set aside transaction. Equally if she were to be made bankrupt, it is all but inevitable that the trustee in bankruptcy would disclaim their interest
A deed is valid whether or not it is made through a solicitor as long as it is drafted correctly. Unless the trustee suspects the date of the deed is not incorrect (e.g. has been artificially backdated) there is little else he could challenge the deed upon. Presumably you would at least be able to prove the date it has been dated.