Declaration of Trust Solicitors
Property Ownership Trusts / Declarations of Trust protect the interests of those who contribute to the cost of purchasing a property.
What is a declaration of trust?
A declaration of trust is a legally binding document which sets out and clarifies the financial arrangements between everyone who has a financial and beneficial interest in the property. Otherwise known as a deed of trust, it could be crucial for your property purchase particularly if you’re buying as joint owners or getting help to buy a property from someone else.
It often relates to the purchase of freehold or leasehold property. If the property is bought in one person’s name, the declaration will help to protect another person (such as parents) who have contributed towards such costs as the deposit, the stamp duty or the mortgage payments and who may wish to recoup these contributions when the property is sold. If the house is bought in more than one name, a declaration of trust will set out the required division of any net proceeds of sale between the parties (usually in unequal shares). The declaration will be recorded at the Land Registry by reason of the entry of a Restriction against the relevant title. The Restriction will let a buyer know that the arrangement exists.
How much does one cost?
The cost will vary depending on the complexity of the relevant circumstances. At Eric Robinson Solicitors, we are happy to work on a fixed fee basis so that you have certainty regarding the cost of the process.
Do I need one?
It is strongly advised where unmarried couples purchase a home jointly, but contribute to the deposit or the subsequent mortgage repayments in unequal shares. In the event of a relationship breakdown, the trust will document the proportions or percentage of the proceeds of sale which will belong to each of the individuals. Please note that your mortgage lender will probably require information regarding the interest split.
There are two ways in which you can own a property jointly:
- Joint tenants- Each joint tenant is an owner and they own an equal share in the property and has an equal right to keep or dispose of the property should they wish to. Should one tenant die, the property passes on to the remaining tenant. Ownership of the property cannot be passed on in wills.
- Tenants in common- Each of the co owners owns separate shares in the property. The property won’t necessarily pass to the remaining party following death as you are able to pass on your shares in your will. A deed of trust is particularly important where people have unequal interests as tenants in common.
How long does one last?
It will apply for as long as the property is owned by the parties in the document.
Can a declaration of trust be challenged?
Amendments can be made only if all parties are in agreement. This may be the case where in the time which has elapsed between the purchase and sale of a house the respective financial interests that each party holds in the property may be completely different.
The only other way to override a one is through a court of law. For example, a family court may rule that the deed of trust would detrimentally harm one party in divorce proceedings.
Another way is if one party believes they have been a victim of misrepresentation or undue influence in the signing of the original document. For example, if they believe that the document does not accurately state the beneficial interest they and other parties have in a property they can apply to the court seeking an order that their true interest is properly recognised. However, cases regarding willingness and free will can be immensely hard to prove.
Can it be backdated?
Backdating is highly unusual and only permitted in certain circumstances. Therefore it is best to speak to our solicitors to guide you through this specialised process.
What can our expert solicitors do for you?
At Eric Robinson Solicitors we will talk to you in a language you understand and guide you through the process from start to finish. Should you need a declaration of trust written up our team of expert lawyers can help. We have years of experience and can create something of beneficial interest to both parties.
Who is allowed to witness one?
A witness to a declaration of trust must match the following criteria. They cannot be one of the other owners or beneficiaries of the trust. They should also have no family connections to either party.
Am I allowed to change it?
Yes, a declaration of trust can be changed as long as both parties agree to this, only then can the trust be changed or rewritten.
Can one be revoked at all?
You cannot revoke a declaration of trust, unless both parties agree to it.
Can I make my own?
You do have the option to write one yourself, however it may not be legally binding and could be easily challenged by someone. It is best to contact our Trust Solicitors for expert advice.
Can joint tenants have one?
Yes, joint tenants can have a declaration of trust. It is common for joint tenants to do this.
Does it need to be registered?
The majority of trusts that are created need to be registered. However, there are some exceptions. Trusts that are imposed by a court for example, do not need to be registered. It is best to contact our solicitors for expert advice as to whether you need to register yours.
Does marriage supersede a declaration of trust?
If a couple decides to get married and they have a declaration of trust together, the trust will be superseded by the marriage.
Can you do a declaration of trust after purchase?
Yes, you can execute a declaration of trust after a purchase. However, it is recommended that you get the trust in place before the purchase. This is because none of the parties involved are obliged to sign it once the purchase is final.
Who can prepare one?
It is best to get a solicitor to prepare a trust. Eric Robinson Solicitors will ensure that your trust is accurate and legally binding.
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