What is a Declaration of Trust?

A Declaration of Trust is a legal document that establishes the ownership arrangement and beneficial interests in a property.

The Declaration of Trust is usually made at the time individuals decide to buy a property and the main purpose of it is to remove any uncertainty as to what will happen to each person’s money should they decide to sell the property in the future.

 Who should get a Declaration of Trust?

A Declaration of Trust is particularly important in the following scenarios:

1. Cohabiting couples- A Declaration of Trust ensures that each party’s financial contribution is acknowledged and protected, helping to remove uncertainty and assist with disagreements, should they arise, in the event that the couple decide to separate and the property is sold.

2. Friends or family buying together- When friends, siblings or other family members invest in property together, it is essential to have a clear agreement in place to avoid future disputes over ownership and contributions.

3. Unequal contributions- if one party contributes significantly more than the other toward the initial purchase price or will be contributing more to the ongoing mortgage, a Declaration of Trust clarifies the disparity in ownership percentages.

 What are the benefits of having a Declaration of Trust in place?

The primary benefit is that all parties to the Deed will have a clear understanding of their rights and responsibilities which avoids future disputes.

A Declaration of Trust ensures each party’s financial contributions are documented, protecting them in cases where there is a relationship breakdown or financial disagreements.

The document provides clear instructions for selling the property or transferring ownership which can reduce stress and conflict.

Lastly, the Declaration of Trust can be updated or modified to reflect changing circumstances e.g refinancing the mortgage or adjusting ownership shares.

 How can a Declaration of Trust be set up?

It is advisable to instruct a solicitor who specialises in this area who will guide you through the process to ensure that the document is tailored to your needs and is drafted correctly. At Franklins, the cost for preparing a Declaration of Trust starts at £450 plus VAT.

We will initially book you in for an appointment where you will discuss with the Solicitor, the details of ownership and your contributions to the property. During this meeting, the Solicitor will also discuss through any risks or other elements that should be considered when putting a Declaration of Trust in place. Once you have had a meeting, we will then prepare the declaration of trust to reflect those terms.

For further advice and assistance please contact our Wills, Trusts and Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk.