In all the excitement of a new home together, it’s easy for individuals to forget to take steps to formalise their legal position or more…
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 later separate.
This is because, under the law, you would be legally entitled to 50% of the property each, no matter how much each of you had contributed to the deposit and mortgage payments.
At Barcan+Kirby, we can help you resolve this by creating a Declaration of Trust. This allows you to specify how the property would be dealt with if you and your partner separate, including what percentage of the proceeds each of you 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.
We have extensive experience in this increasingly common issue, so can ensure that no detail will be overlooked and all of the likely issues will be considered and accounted for. That way, you can have complete 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
Our Declaration of Trust services
Declarations of Trust for tenants in common
This can be used where two or more purchasers wish to have unequal shares in a property. 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.
Declarations of Trust for beneficiaries not on the property title
There are various instances where one party may hold the legal title to a property, but other parties not on the title are intended to have an interest in the property. A Declaration of Trust can be used to make these relationships clear, ensuring everyone’s rights and 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.
Another issue is that people under 18 cannot be on the title for a property, so if a property is bought by or for the benefit of someone aged 17 or younger, an adult will need to hold the legal title for them.
Additionally, there can only be a maximum of 4 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 people not on the title have a legal interest in the property.
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, including one party feeling the Declaration of Trust is unfair or issues with how the trust deed is written meaning its provisions are unclear or not what one or both parties understood them to be.
We have extensive experience in these issues and can help you resolve Declaration of Trust disputes as quickly and smoothly as possible. We have a strong focus 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
How is each party’s share of the property calculated in a Declaration of Trust?
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 then 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 of 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 Trusts allows you to make all of this clear for 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.
What happens to a Declaration of Trust if you get married?
In general, if you get married to a partner who you own a property with, your respective right to the property will then be determined by section 25 of the Matrimonial Causes Act 1973, potentially superseding any Declaration of Trust you entered into.
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 transferring the terms of your Declaration of Trust into a pre-nuptial agreement when getting married, to provide clarity and peace of mind to both partners.
What happens to a Declaration of Trust if one partner dies?
If you are creating a Declaration of Trust, this means you will normally 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, based in Bristol, regularly work with clients throughout the South West and the rest of the UK. We are highly experienced in creating clear, effective trust deeds for property, ensuring 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, while offering 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 are 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 across the UK with all types of Declarations of Trust from our 6 offices in Bristol and the surrounding area located in Bedminster, Clifton, Horfield, Kingswood, Queens Square and Thornbury.