you don't have to.
Declaration of Trust
As more people invest in property it is really important to ensure that those property interests are protected and this can be done by setting up a Declaration of Trust.
What is a Declaration of Trust?
A Declaration of Trust is a document which records the agreement between co-owners as to the nature of their property ownership. It is particularly important if you have a property that is set up as Tenants in Common.
When do you need a Declaration of Trust?
If you are buying or already own property:
- as an unmarried couple
- with friends
- with a business partner
- as an investment arrangement with another person
- if you are contributing differing amounts to the deposit, the fees, the mortgage repayments, the improvements
- if you are contributing to the purchase price of a property but your name will not appear on the property title, your contribution needs to be recorded. For example, if you are a parent helping your children on the property ladder by contributing towards the deposit your contribution can be recorded in a Declaration of Trust so that you get it back when the property is sold.
What will the Declaration of Trust document contain?
The Declaration of Trust will record your agreement on issues such as:
- the amount each person will pay towards the deposit
- the amount each person will contribute towards the mortgage payments
- the percentage of the property each person will own
- the percentage of sale proceeds each person will receive when the property is sold
- the amount to be repaid on sale to anyone who has contributed towards the purchase price
What happens if one owner dies?
Where the property is owned as tenants in common, on death of one of the co-owners their share of the property, which would have been defined in the Declaration of Trust, passes to beneficiaries named in the deceased owner’s Will or if there is no Will under the Rules of Intestacy (which set out who benefits from the estate in the absence of a Will). Therefore, it is vitally important that if you own property as tenants in common you make a Will to dispose of your interest in the property.
When to make a Declaration of Trust?
Ideally, you need to enter into a Declaration of Trust at the same time as buying or acquiring the property. Although, we appreciate that buying a property is stressful enough without adding this additional step and costs but having a comprehensive and legal Declaration of Trust will prevent future (costly) disputes. If you already own property jointly and do not have a Declaration of Trust, it is not too late to enter into a Declaration of Trust retrospectively.
How we can help?
Our Private Client Services team are experienced in handling these matters, taking the time to guide you through the process. So if you would like more information about our Fixed Fee Declaration of Trusts service contact one of our our experts, Dagmara Kulzczykowska or Jenny MacDonald, alternatively you can call on 01908 689317.
- Is there a downside to gifting your property to avoid paying care home fees in later life?
- What does joint tenants or tenants in common on death?
What our client’s say:
“Dagmara took all the stress and strain of sorting wills and probate at what was a difficult time. We couldn’t have done it without her. Excellent”. Clare Dragisic
To see more client testimonials please click here
The Private Client Services Team
Dagmara Kulczykowska Partner
Private Client Services 01908 689341Dagmara is Head of the Department and has many years of experience in all aspects of private client work. Dagmara’s strengths are working with families on very sensitive and emotive matters, providing them with specialist legal advice. She ensures clients are supported but also advised clearly and comprehensively on the legal issue(s) at hand so that they can make an informed decision.