Deed of Trust

A GUIDE TO A DECLARATION OF TRUST

A Declaration of Trust is a statement showing how much of a property is owned by whom. It is often used by unmarried couples, those investing differing amounts in the purchase of a property and where a family member lends money for a deposit.

Who should make a Declaration of Trust?
You should consider making a Declaration of Trust if you are purchasing a property with someone else, moving into someone else’s home or contributing to the purchase of a property that will not be in your name.
The Declaration of Trust will record your agreement as to how the sale proceeds of the property are to be divided between you when you come to sell the property. It could also set out:
• the deposit each of you have paid towards the purchase price;
• the amount each of you have contributed to legal costs, stamp duty and removal costs;
• what share of the property you will each own;
• the percentage of the mortgage each person is responsible for;
• how property expenses will be paid;
• the mechanisms that you will each accept if you need to buy out the other’s share of the property.

Why do I need to protect my investment?
Problems may arise if there is a relationship breakdown, one of you wishes to sell the
property or one of you dies.
Without a Declaration of Trust, a court may order that the sale proceeds should be divided equally amongst the parties. This may be unfair if you have made unequal contributions towards the purchase price of the property or you have spent a significant amount of money on home improvements.

Further Advice

Signed Deed of Gift (from mum or dad)
We will prepare a Deed of gift for you within 24 hours, contact us below What ID is needed from those gifting?
Passport or Drivers licence
Proof of address- copy bank statement or utility billHow to confirm proof of funds (where the gift came from)?
3 – 6 months copy bank statements
Trust/stock shares statement
Copy Will (if inheritance)

How we can help

Our experienced lawyers can advise you on the decisions that need to be made to enable a Declaration of Trust to be set up.
You should note that we are usually only permitted to act for one party to the Declaration of Trust due to the potential conflict of interest between the people involved.

When should the Declaration of Trust be set up?

If you are buying a property with someone else, then you will need to decide whether you hold the property as Tenants in Common or Joint Tenants. Your conveyancing lawyer will be able to advise you further on what is most suitable for you.
If you hold the property as Tenants in Common, you will usually need a Declaration of Trust to support this type of ownership.
Setting up a Declaration of trust when a property is first purchased will make the position clear from the outset. However, a Declaration of Trust can be set up at any time as long as all of the people involved agree. This might be suitable where, for example, one person pays for substantial repairs to the property or pays off a lump sum on the mortgage.