Looking to buy your first property together as a couple?
There are many reasons why setting up a Declaration of Trust can be a great option for both you and your partner. Declaration of Trusts help clarify how your new property is owned and can potentially save you thousands of pounds in the event of your relationship breaking down.
Ready to learn more? In this blog, we’ll give you an introduction to Declaration of Trusts, how they are commonly used and why you can benefit from setting one up. This blog is intended to serve as a basic introduction so please do get in touch if you require more detailed information or advice.
What is a Declaration of Trust (DOT)?
A Declaration of Trust is a legal document which confirms the terms under which a property or other asset is owned, including the share of ownership.
Why do I need a Declaration of Trust?
- They help make sure a property’s ownership share more accurately reflects their financial contribution of their joint owners if it is unequal
- It ensures any proceeds of any future sale are split fairly if the couple break up the future, this is especially important for cohabiting or non-married couples as it gives extra protection
- It can indicate who is responsible for repairs, expenses and maintenance on the property
- It helps prevent misunderstandings and disputes by providing confirmation on exactly how the property is owned
- Helps protect your investment, especially if you have contributed more towards the property than your partner
A case study example
Let's use the example of an unmarried couple (Sam and Mary) who have recently bought a house. Mary contributes £50,000 to the purchase deposit while Sam contributes £25,000.
As part of the purchase, they could decide to arrange a Declaration of Trust to ensure that Mary owns a larger share of the property than Sam to reflect her higher financial investment in the purchase.
After two years of living together, Sam and Mary decide to break up and to sell the home they purchased together. Unfortunately, as they didn’t arrange a Declaration of Trust, there is no legal way to ensure that the proceeds of the sale are split fairly between them (as Mary contributed double the amount Sam did originally).
The house sale proceeds are then split between them 50/50, rather than a fairer and more equitable split in Mary’s favour, leaving Mary significantly worse off than if they had a DOT in place to protect her financial investment in the property.
As you can see from this quick example, a Declaration of Trust can provide valuable future protection for your property investment.
Do you need a solicitor to create a DOT?
While it is technically possible to create a DOT without a solicitor, due to its legal and financial complexity it is highly recommended that you seek legal advice before creating one.
Here at QualitySolicitors Charlesworth Nicholl, our specialist solicitors have extensive experience in every aspect of trust law, including Declaration of Trusts.
Contact us today to see how we can help arrange a Declaration of Trust for your property on 01363 774706 or fill out our quick website enquiry form here: https://www.qualitysolicitors.com/charlesworthnicholl/contact-us