Joint Ownership or Trust for a Couple's Assets

When two people hold assets together, the simplest route is to register them in both names. The alternative is to settle the assets on a trust. The trust vs joint ownership question looks like a matter of paperwork, but the two tools allocate ownership, control and risk in very different ways. This page compares them for spouses and for brothers and sisters who share property or savings.

It gives general information, not advice. The right answer depends on your family, your assets and where you live, so have a qualified adviser check it against your facts.

What joint ownership means in Mauritius

Joint ownership of property in Mauritius is usually called indivision (or copropriété where a building is divided into units). Each co-owner holds a share of the whole asset. No co-owner owns a specific room or a specific account balance, and none can deal with the whole without the others.

Three features matter most:

• Each co-owner owns something personally. A share in an indivision is part of that person's own estate. It can be seized by that person's creditors and it passes on their death.
• Decisions are shared. Major decisions, such as selling or mortgaging, generally need everyone's agreement. Day-to-day management is often handled by agreement or by one co-owner.
• Exit is generally available. As a rule of Civil Code tradition, no co-owner can be forced to stay in indivision indefinitely, and any of them may ask for the asset to be divided or sold. Agreements can postpone this, within the limits of the law.

Joint ownership works well for a family home or a joint bank account when the couple's interests are aligned and nothing is expected to change. The weak points appear on death, divorce, incapacity, a dispute between co-owners or a claim from a creditor.

What a trust does differently

In a trust, the settlor transfers assets to a trustee, who holds the legal title and administers them for the beneficiaries under the trust deed and the Trusts Act 2001. The beneficiaries are not co-owners of the assets. They have rights against the trustee, and the extent of those rights depends on how the trust is written. For background, see what a trust is and the Trusts Act explained.

This separation changes the picture:

• The assets are no longer in anyone's personal estate in the way a joint share is, so a death does not automatically split them.
• One decision-maker, the trustee, acts under written duties. Nobody needs the agreement of every family member for each step.
• The deed can set out who benefits, when and in what order, including after both spouses have died.

A trust also brings costs and obligations that joint ownership does not. A professional trustee must hold the right licence, keep accounts and records, and deal with the supervisory regime. These points are covered on other pages and are not repeated here.

Trust vs joint ownership: side-by-side comparison

Death: where the two diverge most

Joint ownership on death

When a co-owner dies, their share does not vanish into the survivor's hands. It forms part of the estate and is distributed under a will or under the intestacy and forced heirship rules. A spouse may therefore find that a share of the family home is held by children, siblings or other heirs. See who inherits when there is no will and surviving spouse rights.

For siblings, the effect is similar: the share of a deceased brother or sister goes to their own heirs, who then become the surviving siblings' co-owners. A property held by two siblings can become a property held by one sibling and a niece, a nephew and a former spouse.

A trust on death

Because the trustee holds the assets, the death of the settlor or of one spouse does not by itself require the trustee to split them. What happens next depends on the deed: it might continue for the survivor, pass to children, or terminate. What happens to a trust when the settlor dies explains the usual consequences.

A trust is not a way around the rules on reserved shares. Mauritian succession law protects certain heirs, and a court may look closely at transfers made to defeat them. Read forced heirship and trusts before assuming that moving assets into a trust settles the question.

Creditors and family disputes

Under joint ownership, a creditor of one co-owner can pursue that person's share. This can force a sale or a partition even when the other co-owner has done nothing wrong. A couple who own everything jointly therefore share each other's business and personal risks.

A trust can place distance between the assets and a personal creditor, but only if the transfer was genuine, made at a proper time and not designed to defeat existing creditors. The rules are set out in trusts and creditors. A court can also look through an arrangement that is a pretence, as discussed under sham trusts.

The same caution applies to divorce. A trust does not remove assets from a court's reach in every case, and a long-standing joint account may be treated differently from a trust. For more on this, see protecting trust assets from divorce.

Privacy and records

Under the Trusts Act 2001, the trustee must keep information about the trust confidential. A court orders disclosure only on the request of an investigating authority, and only where the information is required in good faith for an investigation or proceedings concerning a financial crime (article 33, as rewritten by Act 9 of 2019, in force from 29 May 2019). The trustee must also keep up-to-date accounts and records, including an alphabetical register of the names and last known addresses of each beneficiary and settlor; accounting records are kept for at least 5 years after completion of the transactions concerned (article 38(3)).

Confidentiality is not secrecy from the authorities. For the practical limits, see are Mauritius trusts confidential?.

Joint ownership has no equivalent duty. Ownership of land and bank accounts is recorded through the usual channels, and the co-owners decide for themselves what to tell their family.

Special points for property in Mauritius

Two rules in the Trusts Act 2001 are worth knowing if the assets include land or buildings:

• Under article 10, income may be accumulated for the maximum duration of the trust, but for no longer than 25 years where the trust holds immovable property situated in Mauritius.
• Under article 60, a foreign trust is governed by its own terms and law, but it is not enforceable in Mauritius where it would apply directly to immovable property situated there.

Immovable property in a trust is also a topic of its own: see whether a trust can own property in Mauritius. Non-citizens should check the property restrictions and any duties that apply to transfers before choosing a structure, because the cost of moving a property into a trust can outweigh the benefit.

Which suits a couple, and which suits siblings?

Spouses

Joint ownership is simple and cheap, and it suits a couple who own a modest home and savings and have no complicated family. A trust becomes more attractive when there are children from earlier relationships, a family business, assets in several countries or a wish to control what happens after both spouses have died. See a trust for a blended family and the family trust.

Brothers and sisters

Siblings inheriting or buying together often drift into indivision by default. It can work while everyone agrees. It tends to break down when one sibling wants to sell, needs cash or dies. A trust gives them a single administrator and a written rule for these moments, although it needs a trustee they all accept.

Related alternatives

A trust and joint ownership are not the only options. A will deals with death but not with incapacity or management during life. A gift to children transfers ownership outright and cannot easily be undone. Each has a different cost, a different level of control and different tax and succession effects.

To discuss your own position with an adviser through a licensed provider, use the contact form.