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A declaration of trust or deed of trust is used to set out the details of who has a financial interest in property and the extent of that interest.
It is put in place at the time a property is purchased and is a legally binding record of the agreed share each person holds.
A declaration of trust gives everyone clarity as to the ownership of an interest in property. It is particularly useful where one person is contributing more towards the price or where one person will be paying more of the mortgage.
A declaration of trust can protect money given by a third party towards the purchase, for example, where parents have given a lump sum. The document can also cover how the property will be dealt with, for example, where one person wants to sell or let it and who will be responsible for outgoings and maintenance.
At Glanvilles Solicitors, we can explain how your interest in property can be established and draw up the necessary trust deed to ensure this is legally binding.
Our advice in respect of declarations of trust includes the following:
If you have an interest in a property that is being purchased, we can ensure that this is protected and that there is clarity around how the property and expenses will be dealt with.
Contact your local Hampshire or West Sussex branch of Glanvilles Solicitors in Chichester, Fareham, Havant or Petworth or fill in our simple online enquiry form for a quick response from one of our expert contentious probate solicitors.
Our trusts experts can advise you on the provisions to go into a declaration of trust to protect your interests and set out how the property ownership will be managed.
We have in-depth expertise in the complex area of trust law. We will ensure that you have the trust deed that is right for your situation and that we explain the details to you clearly, answering any questions you may have.
At Glanvilles, we offer outstanding service as well as genuine legal expertise. You will have your own personal lawyer who will deal with your case and who will work proactively to move matters forward as quickly and cost-effectively as possible.
When you use our contract dispute resolution services, we promise:
A declaration of trust works by setting out details in respect of joint property ownership. When a property is purchased, a declaration of trust can specify how much each person’s share is and ensure that the legal owners and anyone else with an interest knows exactly how the property will be dealt with.
A declaration of trust is a deed and, as such, is a legally binding document.
It does not have to be registered at the Land Registry, and it overrides the title deeds because it sets out who is a beneficial owner of the property. This can be a difficult principle to understand, but it means that someone who is not registered as an owner at the Land Registry can still be recognised as a legal owner.
If you will have a stake in a property, but there is no legal agreement in place setting out the extent of your stake, then a declaration of trust is recommended.
This could be where you are buying a property with your partner, and you will be putting in more by way of a deposit, and you wish to protect this so that you will not lose it if you separate and sell the property.
It is also useful where parents give or loan their child money for them to buy a property jointly with someone else. In the event that the couple separate, a declaration of trust could prevent the other owner from taking any of the money that the parents have put into the purchase.
A declaration of trust is also used where several parties want to buy a property together, with different shares owned by each.
A declaration of trust can be tailored to your specific needs but will often include the following provisions:
In the event of a death, the deceased’s share in a property will be dealt with by their personal representative as part of their estate. This could cause difficulties if the beneficiary wishes to sell the property, so the situation should be considered at the time the declaration of trust is made.
A declaration of trust is a binding agreement. If one party wishes to overturn a declaration of trust, they will need to show a valid reason for this, such as being placed under duress to sign or the existence of fraud or misrepresentation.
A mortgage lender may occasionally need to consent to the declaration of trust if their security is affected, although this is not usually necessary. An example would be where someone was granted a right to occupy a property under a trust deed, meaning that a mortgage lender would not be able to evict them if they needed to repossess the property.
A deed of trust is not cancelled on marriage. However, if you divorce, the court could vary the terms of the trust or set it aside. The court will consider the contents of the declaration of trust alongside the needs of the parties and any children involved. It will aim to make a fair division of assets, and it may consider that the terms of the declaration of trust do not provide this.
A pre-nuptial agreement or post-nuptial agreement is a more secure way of trying to protect your financial interests in marriage.
While it is possible to draw up and execute a declaration of trust without involving a solicitor, you are strongly recommended to take legal advice. A solicitor will be able to discuss exactly what you want to be included and ensure that the deed is well-drafted so that it will stand up in court, should it ever need to.
You also reduce the risk of a dispute arising if the declaration is clear, comprehensive and unambiguous. Where both parties have taken independent legal advice before signing, there is also likely to be less scope for a legal challenge at a later date.
Putting a declaration of trust in place will give you the security of knowing that your interest in a property is adequately protected.
To speak to an expert solicitor on declarations of trust for trusts advice, give us a call at your local Hampshire or West Sussex branch in Chichester, Fareham, Havant or Petworth or fill in our simple online enquiry form for a quick response.