{"id":3060,"date":"2021-04-01T15:46:54","date_gmt":"2021-04-01T15:46:54","guid":{"rendered":"https:\/\/dodgerblue-horse-723109.hostingersite.com\/?p=3060"},"modified":"2024-05-20T09:02:20","modified_gmt":"2024-05-20T09:02:20","slug":"im-thinking-of-buying-a-property-but-should-i-invest-in-a-declaration-of-trust","status":"publish","type":"post","link":"https:\/\/sherylperrysolicitors.uk\/im-thinking-of-buying-a-property-but-should-i-invest-in-a-declaration-of-trust\/","title":{"rendered":"I\u2019m thinking of buying a property, but should I invest in a Declaration of Trust?"},"content":{"rendered":"\t\t
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Yes. By setting up a Declaration of Trust at the outset of any joint ownership benefits everyone involved and provides clarity on each parties\u2019 intentions which can avoid any financial disputes in the future.<\/p>\n

Buying a property is one of the biggest financial commitments we will make in our lifetime and it is something that you need to get right from the get-go and do everything possible to protect your investment \u2013 and the investment of any other parties financially involved. There are two categories of people that a Declaration of Trust is especially important for: those jointly buying a property with an unequal deposit, and those who are buying property and getting financial assistance from someone else, like their family.<\/p>\n

If you\u2019re just starting your research into a Declaration of Trust, you may well come across the term \u2018Trust Deed\u2019, but don\u2019t worry \u2013 it\u2019s usually the same thing!<\/p>\n

By setting up a Declaration of Trust you can legally outline the financial arrangements of each parties\u2019 ownership. This prevents any financial uncertainty around your investment in years to come if there was ever a separation.<\/p>\n

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When would I need a Declaration of Trust?<\/strong><\/p>\n

A common situation where you would need a Declaration of Trust is when one or more persons own a property but they need to legally set out their initial financial contributions. This could apply to couples just starting out and buying their first home together or a group of friends who have purchased a property jointly. <\/p>\n

Often, Bank of Mum and Dad get financially involved when their children fly the nest and a chunk of the deposit money may well come from them. To protect their share in the joint financial investment, there contribution should be cited in any Declaration of Trust also. <\/p>\n

So how does this work?<\/b><\/p>\n

In this example 3 friends have purchased a property together but they have contributed uneven sums of money to the deposit\/fees \u2013 Friend A contributed 70% and Friend B contributed 30% and Friend C had no money for a deposit \u2013 the mortgage payments and bills are split equally every month. We would highly recommend that a Declaration of Trust be drawn up showing these contributions and set out their respective shares of ownership. When it comes to the sale of the property for whatever reason (possibly and commonly a breakdown in friendship) the deposit\/fees investment percentage is protected rather than the property be sold and the profit split three ways. Without a Declaration of Trust, this could happen and Friends A & B would be very short changed with Friend C benefiting more from the sale.<\/p>\n

What else do I need to know about a Declaration of Trust?<\/b><\/p>\n