What is a declaration of a Trust?

A declaration of Trust is a document which states who owns an asset and in what proportions. This asset could be a property, piece of land, or a bank account for example.

An example declaration of Trust arrangement arises where a couple wish to purchase a property together, but they are making unequal contributions towards the purchase. In that case, they may seek to protect their own contributions by making a declaration of Trust, which sets out, how the sale proceeds are to be divided.

The legal ownership of the asset does not change, but the declaration of Trust states who is entitled to the ‘beneficial interest’ in that asset.