A declaration of trust is a legal document which protects your interest in a property, even if you are not named on the title deeds. For example, if you have helped your child and their partner purchase a home, a trust declaration can record your contribution and ensure that it is not lost if they should separate. It is also a means by which joint owners can set out what each is entitled to, based on their initial contributions or arrangements for payment of mortgage and outgoings during ownership.
At David W Harris & Co., we can work with you to establish how a property should be legally owned to safeguard your interests and those of anyone who has helped with the purchase. We draft bespoke declarations of trust, tailored to your needs, which you will be able to rely on in the future.
Our team of property law experts have many years of experience in dealing with trust matters and property ownership. We will ensure that you have the legal framework you need for any investment and provide detailed advice on your situation.
Our declaration of trust services include:
- Advice on the options open to you
- Drafting a declaration of trust
- Advising you on any trust document you have been asked to sign.
Contact our declaration of trust solicitors in South Wales
Our declaration of trust solicitors in Pontypridd, Swansea and Talbot Green can give you the guidance you need to protect your property investment for the future. We also provide related services, including conveyancing and Will drafting.
To speak to one of our declaration of trust solicitors in South Wales you can call one of our offices in Pontypridd, Swansea and Talbot Green. Alternatively, we have an easy-to-use contact form.
Our declaration of trust services
Advice on the options open to you
If you are buying a property jointly with someone else, you can own it in two ways:
- Joint tenants; or
- Tenants in common
If you own it as joint tenants, then you will both own the whole property together and should one of you die, the other will automatically own the property. This means that you cannot leave the property in your Will. If you separate, you will usually share the sale proceeds equally.
If you own a property as tenants in common, then each of you will own a specified share of the property. A declaration of trust will set out what proportion each of you owns and what your entitlement would be on sale or death. Your share will pass under the terms of your Will or, if you do not have a Will, under the rules of intestacy. If you separate, you will be entitled to the share you own according to the declaration of trust.
We can advise you of the best course of action and discuss any other options that may be open to you.
Drafting a declaration of trust
While a declaration of trust is generally straightforward, deeds of trust can be more detailed and should be professionally drafted to avoid any errors. While declaration of trust templates exist, they are not recommended. By asking a professional trusts solicitor to draw up the document, you can be sure that you have the advice you need, that the deed has been correctly drafted and that it is in your best interests to sign.
Our trusts solicitors can draw up a comprehensive deed of trust and ensure that it sets out exactly what you want to happen to your property.
Issues that can be included in a deed of trust are:
- How the sale proceeds will be split. For example, you could receive back the percentage you paid by way of a deposit, plus half of the remaining equity
- What contributions each of you will make to mortgage payments
- Any adjustments in the way sale proceeds will be shared, for example, if one party pays for renovations
- Other relevant issues, such as a declaration of trust for rental income from an investment property
Advising you on any trust document you have been asked to sign
If you have been provided with a deed of trust to sign by the other property owner, we can advise you on the terms. Where necessary, we can negotiate on your behalf to ensure that the document is fair and reasonable.
Declaration of Trust FAQs
What is a declaration of trust?
A declaration of trust for property is a legally binding document that details how a property is owned and how the financial interest will be shared. It is usually drafted and signed when a property is purchased so that those who have contributed to the purchase and who will be paying any mortgage know where they stand financially.
The most common use of a declaration of trust is in a tenants-in-common situation where joint purchasers agree to own differing shares of a property. A declaration of trust example can be very simple and merely set out the percentage of the property each party is entitled to, or it can be a more detailed deed of trust if necessary.
Declaration of trust costs are modest and having one in place can avoid misunderstandings and disputes in the future. They can also save you a lot of fees if you have to try to negotiate with any co-owner.
Does a declaration of trust need to be registered with HMRC?
A declaration of trust does not need to be registered with HMRC. However, it is possible to enter a restriction on the Land Register, which will ensure that when the property is sold, a certain process needs to be followed, for example, someone will need to sign the transfer document on behalf of each of the individuals named in the declaration.
Can a declaration of trust be challenged?
A declaration of trust cannot usually be challenged unless it is alleged that it was made fraudulently or because of misrepresentation. Another possible ground for challenge is if the declaration of trust form is poorly drafted and unclear or ambiguous.
How long does a declaration of trust last?
A declaration of trust will normally last as long as the property ownership continues. It may contain clauses setting out any potential for variations or revocation.
Is a declaration of trust legally binding?
A declaration of trust is legally binding. Declaration of trust witnesses are not required, but if the declaration is included within a transfer deed or a more detailed deed of trust is used, then witnesses will also need to sign.
Contact our declaration of trust solicitors in South Wales
If you want advice on protecting your share of a property or you have been asked to sign a trust deed, we can provide the guidance you need.
To speak to one of our declaration of trust solicitors in South Wales you can call one of our offices in Pontypridd, Swansea and Talbot Green. Alternatively, we have an easy-to-use contact form.