A declaration of trust allows a person to set out how a property is owned in situations where someone cannot or does not want to register who really owns it at the Land Registry.
This document creates a trust, appointing trustees to hold property for the benefit of the beneficiaries, e.g. for third parties who helped buy the property, or maybe for their children. Trustees can also hold money for themselves as beneficiaries.
A Trustee is simply a person who is responsible for looking after the money or property that is held by the trust. Under the Trustee Act 2000, trustees are expected to act in a manner appropriate to the responsibility that comes with the position, and to protect the interests of the beneficiaries.
Property legal ownership is either found in the title deeds or registered at the Land Registry.
A declaration of trust can override the title deeds. It confirms who are the true beneficial owners of the property and the proportions they each hold, regardless of what the deeds or Land Registry records state.
It permits an owner who is not registered on the deeds at the Land Registry to be recognised as an owner, and to be given the same legal protection as other registered owners.
A declaration of trust can be lodged at the Land Registry, so that it becomes public knowledge – allowing a prospective purchaser to know who they are buying from.
It costs you nothing to create your "Declaration of Trust of Property to a Beneficiary" document.
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An adult child borrows money for a deposit on a first house from his or her parents.
The parents may have a mortgage already, and the terms of that mortgage prevent them from borrowing under another. So the adult child has to apply for the mortgage for his or her house alone.
However, the parents want the secure knowledge that when the house is sold, they will get their deposit back. There may be an arrangement to pay them some of the increase in the property price as interest.
So, the parents lend the money for the deposit to the adult child, the adult child obtains a mortgage, and the title deeds provide that the adult child is the sole owner of the property (the mortgage charge is also recorded as such). The parents and child create a declaration of trust that sets out the true ownership, and who receives what share of the sale proceeds when the property is finally sold on. This means the Deed of Trust records the parents' beneficial interest in the property.
In this example, the Trustee would be the adult child, and the beneficiaries would be both the adult child and the parents in shares that were discussed and agreed.
Using our state of the art online document editor you will quickly and easily capture all the information you need to make your own 'Declaration of Trust of Property to a Beneficiary'. You'll see the document update as you enter more information and change various options.
Our template contains a cover page that explains what to do with respect to registering this deed with Land Registry.
There are three steps involved in creating a document from any of our online templates.
In order to complete the 'Declaration of Trust (of Property to a Beneficiary)' agreement, you'll need to know (or gather together) the following information:
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You can get your 'Declaration of Trust of Property to a Beneficiary' in a variety of file formats along with some other additional value added services. These include:
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