Are you and your partner currently cohabiting, or intending on cohabiting in the near future and seeking a robust legal document to safeguard your respective assets and ensure your financial future? Then you should consider having a Declaration of Trust drawn up.
A Declaration of Trust is a legal document setting out the party’s respective shares in the property and is supported by a restriction being placed upon the registered title at the Land Registry. This is a useful document if you are an unmarried couple and have made unequal contributions to the deposit of a house purchase, or have lent someone the money to buy a property. It assists if the parties break up and the property is to be sold, as it will define your respective shares in the property and can ring fence the initial deposit paid to ensure repayment to its rightful owner. These are best undertaken when a property is initially purchased, as it can be registered at the same time as the purchase. There are many variations to this document of which can be discussed in full at an initial meeting.
It provides piece of mind to the initial investor that their initial deposit will be protected and repaid if the parties separate. A Declaration of Trust is legally binding, but a Family Court may disregard it when dividing financial assets in divorce proceedings if the parties later marry. It must be noted that if the parties do subsequently marry, then the matrimonial proceedings could override any pre-existing Declaration of Trust, but it will give indication to the court to consider the initial intention of the parties to the document. It outlines how the property will be owned, including any future financial arrangements and can assist in what happens if one party wishes to buy out the other party.
Declaration of Trusts can be tailored to suit your specific needs and circumstances. Whether you’re safeguarding family assets, or supporting philanthropic endeavours, our team will customise a solution that aligns with your goals.
There may be issues which need to be addressed with the mortgage lender if parents are lending their child the money to purchase the property and this should be discussed with your mortgage broker/lender, and/or conveyancing solicitor, prior to entering into the Declaration of Trust.