A Declaration of Trust is a document in which a person declares that they hold the property on trust for the benefit of themselves or others.
It is always advisable for co-owners who hold property as tenants in common to enter into a Declaration of Trust. The document can then confirm the extent of their respective beneficial interests in the property. Typically, this is more relevant to couples who are unmarried or not in civil partnerships, but can be relevant for second marriages and family co-ownerships.
Alternatively, a Declaration of Trust can reflect each person’s share according to their financial contributions throughout the ownership of the property. This may be of particular relevance to cohabitees where one partner is the sole legal proprietor of the property, but acknowledges that the other partner, through the contributions they have made towards the property, has acquired a beneficial interest. This can be by way of repairs and improvements and contributions towards mortgage payments.
A Declaration of Trust can also be used where another person has contributed to the purchase price of a property and therefore acquired a beneficial interest in the property. This may be of particular relevance to parents who help their children buy their first property and it is neither a gift nor a loan. The Declaration of Trust can record either a returned percentage to the person who contributed or a return of their initial investment when the property is sold.
These are just some situations where a Declaration of Trust can be used and for further advice on how a Declaration of Trust may be of benefit to you, please contact the Wills, Trusts & Probate team.
