Do I need a Declaration of Trust?
Joint tenants
As joint tenants (sometimes called ‘beneficial joint tenants’):
• you have equal rights to the whole property
• the property automatically goes to the other owners if you die
• you can’t pass on your ownership of the property in your will
Tenants in common
As tenants in common:
• you can own different shares of the property
• the property doesn’t automatically go to the other owners if you die
• you can pass on your share of the property in your will
Please note that when parties put in unequal shares of monies into a Joint Tenancy this creates an ownership as though both parties have contributed equally and are 100% owners jointly and financially
If you are concerned you may wish to consider Tenants in common and/or a Declaration of Trust
Who Should Get a Declaration of Trust?
A Declaration of Trust is useful for anyone who is buying a property with someone else as joint owners, or who is buying a property with the help of someone else.
Buying Property as Joint Owners
When you buy a property with someone else, it’s possible that you won’t be dividing the costs 50/50. One of you might be putting more towards the deposit, or one of you might be paying more towards the mortgage repayments.
a Declaration of Trust allows you to set out how much money each person is putting in and how much money each person should receive when the property is sold, or when one person is bought out by the other.
Buying Property with the Help of Someone Else
These days it’s common for people to receive financial help from family members and friends when buying a property. In most cases the people providing financial assistance will want their money back, even when the money comes from the bank of mum and dad.
A Declaration of Trust, or Deed of Trust, can specify how much money should be repaid, and in what circumstances this money should be repaid. This will protect that person’s investment, helping to ensure it isn’t lost.
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