Declaration of Trust Solicitors
Providing peace of mind when co-owning your home
If you buy a house with your partner without getting married or entering a civil partnership, you could be leaving yourself open to problems if you separate.
Joint owners are presumed to own 50% of the property each, no matter how much you contributed to the deposit and mortgage payments. This can be resolved by creating a Declaration of Trust.
Our Declaration of Trust solicitors advise co-owners across Bristol and the surrounding area from our offices in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury.
What is a Declaration of Trust?
A Declaration of Trust (also known as a Deed of Trust) is a legal document that confirms the shares someone has in a property. It removes any uncertainty about what will happen to each person’s money should they go their separate ways or sell the property.
By creating a Declaration of Trust, you can specify how the property would be dealt with, including what percentage of the proceeds each party would be entitled to if the property were sold.
A Declaration of Trust can also be used when only one party’s name will be on the title at the Land Registry, but another party or parties will have an interest in the property. This might be where one partner is buying a property, but the other will contribute to the mortgage. Or, where parents or other relatives provide some of the money to buy a house and it is agreed that they will retain a stake in the property as a result.
How our Declaration of Trust solicitors can help
Our Declaration of Trust lawyers have extensive experience preparing these documents for property co-owners. We can ensure that no detail is overlooked and all likely issues will be considered and accounted for. That way, you can have peace of mind that your long-term interests are protected, no matter what the future brings.
Get in touch with our Declaration of Trust solicitors in Bristol and South Gloucestershire
To speak to our specialist team, call us on 0117 325 2929 or complete our online enquiry form.
Our Declaration of Trust services
Tenants in common
A Declaration of Trust can be used where two or more purchasers wish to have unequal shares in a property, holding the legal title as tenants in common
This type of agreement will either specify what percentage of the property each of you owns, or how your shares will be determined if you later separate and/or sell the property.
Joint tenants
Property ownership as joint tenants means the legal owners have equal rights to the property and their details are recorded on the legal title of the property held at HM Land Registry.
A joint tenancy ends if the property is transferred to one owner, sold or severed by notice/agreement. It is important to note that, if one party dies, ownership automatically passes to the surviving party.
Beneficiaries not on the property title
There are various instances where one party may hold the legal title to a property, but other parties wish to be recognised as having an interest in the property. A Declaration of Trust can be used to make these interests clear, ensuring everyone’s rights and financial interests are protected.
A common example of where this kind of Declaration of Trust can be used is where parents or other family members provide some of the money to help you buy a property, which will be solely in your name, but they have the right to a share of the proceeds if the property is rented or sold.
Children who are under the age of 18 cannot be on the legal title for a property. Therefore, if a property is bought by or for the benefit of someone aged under 18, an adult will need to hold the legal title for them.
Additionally, there can only be a maximum of four people on the title of a property. So, if more than four people are purchasing a property, a Declaration of Trust can be used to establish that those not on the title have a legal interest in the property.
Where additional parties hold an interest in the property and they are not on the legal title, it will be necessary to register the Trust with HM Revenue & Customs (TRS).
Declaration of Trust disputes
Even where a Declaration of Trust exists, there can still sometimes be conflict between the parties involved in the Trust. These issues can arise for a number of reasons. For example, if one party feels the Declaration of Trust is unfair or there are issues with how the trust deed was written, meaning its provisions are unclear or not what one or both parties understood them to be.
Our specialist solicitors can help you resolve Declaration of Trust disputes as quickly and smoothly as possible. We are focused on non-confrontational dispute resolution, so can usually find a positive solution without the need for court action, saving you time, money and a lot of unnecessary conflict.
Declaration of Trusts FAQs
The best time to get a Declaration of Trust is during the conveyancing process and before your exchange/completion dates.
Whether you have been with your partner for 20 years or are buying a house with a friend, no matter how well you think you know or trust someone, having a Declaration of Trust provides security and peace of mind if things change or go wrong.
A Declaration of Trust typically includes:
- How much each person contributed towards the deposit and how much will be repaid if the property is sold or its ownership is transferred
- How much each party will contribute towards legal fees, stamp duty and mortgage payments (it can also specify bills)
- The percentage each party will own and how the money will be split if the property is sold
The trust deed may specify that each party is entitled to a set percentage of the property, or it may set out a mechanism for calculating each party’s share if and when the property is sold.
So, if one party contributed 75% of the deposit, other purchase costs and monthly mortgage payments, and the other party 25%, it would normally make sense for these to be the percentages of ownership each party held.
However, where one party contributes the majority or all the deposit, but mortgage payments are then split equally, the partner who contributed less originally will be slowly increasing their share of the total equity in the property over time. Therefore, there needs to be an agreed formula for working out each party’s share when a sale is made to reflect the amount of equity each has built up at that point.
A Declaration of Trust allows you to make all this clear at the outset, avoiding confusion and minimising the potential for any conflict if the property later needs to be sold or one of you needs to buy out the other’s share.
In general, if you marry a partner you own a property with, your Declaration of Trust will be affected. Your right to the property will instead be superseded by section 25 of the Matrimonial Causes Act 1973. This Act provides the court with power to redistribute assets based on various factors and the financial agreement that forms part of the divorce will establish what happens with the property.
However, you can provide a provision in your Declaration of Trust for what will happen if you marry, which is generally a sensible step to take, even if you have no immediate plans to get married.
It may also be worth considering a pre-nuptial agreement when getting married, to provide clarity and peace of mind to both partners.
If you are creating a Declaration of Trust, this means you will usually be buying your home as tenants in common. As tenants in common, you can each leave your respective share of your property to whomever you like, but this must be set out in a valid Will.
If you do not create a valid Will, who inherits your share of the property and any other assets will be determined by the standard rules of intestacy, meaning your wishes will not necessarily be carried out.
Our Declaration of Trust expertise
Our Declaration of Trust solicitors regularly work with clients throughout Bristol and the rest of the UK, from our offices in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury.
Our lawyers are highly experienced in creating clear, effective trust deeds for property. Our aim is to ensure your legal and financial interests are protected, no matter what the future brings.
We provide a friendly, empathetic service, designed to make creating a Declaration of Trust as simple and stress-free as possible. All with the reliable expertise you need to give you complete peace of mind.
Many of our team are members of the Society of Trust and Estate Practitioners (STEP) and our property team is Conveyancing Quality Scheme (CQS) accredited, meaning we can provide a reliable, comprehensive service for everything to do with buying property and creating trusts.
Barcan+Kirby has also been recognised by the Law Society with their Lexcel accreditation, reflecting the strength of our client services and we are independently regulated by the Solicitors Regulation Authority (SRA).
Contact our Declaration of Trust lawyers in Bristol
We support couples and families with all types of Declarations of Trust from our offices in Bristol and the surrounding area.
Speak to our specialist Declaration of Trust solicitors now by calling 0117 325 2929 or using our online enquiry form.