Common uses of a Declaration of Trust
A declaration of trust is not some special form of trust. In straightforward terms it’s just a technical legal term for the formal document setting up a trust. A declaration of trust is also referred to as a deed of trust.
A trust can be created deliberately and documented in a declaration of trust or a trust can arise by implication, through conduct.
Setting up a trust involves creating a situation, in law, where the legal ownership of assets is separate from the beneficial ownership. The legal owners hold and sometimes manage assets for the benefit of the beneficiaries. The legal owners, who are trustees, have legal duties and obligations to the beneficiaries.
Reasons for creating a declaration of trust
The most common form of trust in English law relates to property co-ownership. Where there are joint owners of a property, regardless of whether there is a formal declaration of trust in place, the registered joint legal owners at the Land Registry will automatically hold the property on trust.
In many cases, a deed of co-ownership is important so as to split and define each beneficial owners part of the property so as to avoid what is known as the Right of survivorship, where otherwise that owners n]=beneficial ownership would automatically go to the other owner, even overriding a will which says otherwise. So, a property co-ownership deed of trust is very common and especially where the owners are not married.
If you need advice on a property declaration if trust, please contact us, we can help.
There are many other situations where a formal declaration of trust is important such as :-
- A trust for family property.
- General family trusts to preserve wealth.
- Trusts for mentally or physically disabled family members.
- Estate and tax planning trusts.
- Trusts where the aim is privacy, control or professional management of assets.
- Charitable trusts.
Drafting a declaration of trust
As with almost all important legal documents, in today’s internet age, finding a template with the basic clauses and elements is easy. The building blocks are there. However, given that trusts have very significant legal implications and considerations, objectives and risks can vary hugely, careful consideration, planning and accurate and careful drafting are essential.
Our expert trust lawyers ensure that before drafting any declaration of trust for you, we will fully consider your objectives and advise on the pros and cons, including potentially unforeseen risks based on our experience.
You will expect us to have the skills and experience to draft trust documents the right way, ensuring you understand how the document works and what’s included and why. After all, there’s not much point in having any legal document which only a lawyer understands and you do not, as client.
Get in touch with us to discuss setting up a trust, our experience and how we can assist you.