A Declaration of Trust, also known as a Deed of Trust, is a legally binding document which records the financial arrangements between joint owners of a property and anyone else who may have a financial interest in the property.
The purpose of a Declaration of Trust is for you to determine what happens to each person’s money. Even if the property is being held at the land registry (the legal title) by one party, you can still have a declaration to confirm the shares of others who have an interest (known as a beneficial interest).
A Declaration of Trust should exist each time you buy a property with someone or with the help of someone unless all contributions to the purchase and going forward, will be equal. You should record differing contributions either to the purchase, with deposits and costs of buying or when you will be unequally contributing to the mortgage or outgoings for the property. It can set out how much each person is putting in and how much each person should get on sale. Having a Declaration of Trust avoids the uncertainty of what will happen when the property is sold or other circumstances arise.
A Declaration is ideal to protect funds when one party’s family has provided assistance for a deposit and where contributions are not equal, which is rarely the case in real life.
If you have already brought your property, all is not lost, as you can still have a Declaration at any time but it is best to get it completed as soon as possible.
One of our Solicitors would be able to help you with a Declaration of Trust and the options for dealing with your shares, be it that you protect the sums of money you or your family put it or even giving you an increased percentage share to reflect your initial investment.
Please contact us if you need to know more. You can fill out our enquiry form and we will get back to you.
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