A declaration of trust is a legal document which confirms the terms on which an asset, such as a property, is held on trust. The document usually records the portion of the ownership of the property and also the other terms agreed by the parties. It acts as evidence of the agreement made, and is used on a future sale or transfer of the property. This is to confirm how the net sale proceeds are to be distributed. If a dispute ever arose in the future, the court would use the Declaration of Trust as a starting point.
Why is it important?
It is important as it protects the investment you have made into the property if things do not go as planned. For example, in the event that you separate from the person you purchased with the funds are protected.
If you were to purchase a property and wish to legally outline your contribution to the property, then a Declaration of Trust is necessary. As an example:
Mabel purchased a property with her mother, Karen. Mabel pays for £300,000 worth of renovation and a Declaration of Trust is drawn up. In the future when a sale happens, Mabel will receive the amount she paid on renovation. Afterwards, the remaining proceeds will be split equally between Mabel and Karen.
While your Declaration of Trust cannot be amended, a supplementary one can be made. This then alters the terms of your original Declaration of Trust. By referring to the original Declaration, it outlines what has happened since and what the shares are now.
What we can do for you
At Attwells Solicitors we are property law experts, and as a result we can provide niche property law services such as drafting Declarations of Trust agreements. If you are already using Attwells for your conveyancing, you would receive a discount.
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