Understanding Declarations of Trust When Buying Property

Our series designed to make legal matters easier to understand.

Buying a property together is an exciting step, but it can also raise important questions about who owns what and how contributions should be recognised. A declaration of trust is one of the simplest ways to protect everyone’s interests. Whether you are buying with a partner, a family member or a friend, this article provides clarity from the outset and helps prevent disagreements later on. Kelly Dawkins, Head of Private Client at TMT Legal Services, explains what a declaration of trust does, how it works and what changes when you get married.

What is a Declaration of Trust

When more than one person buys a property together, it is important that everyone is clear about who owns what. A declaration of trust is the document that records those details. It sets out each owner’s share of the property, how much each person has contributed and how any sale proceeds should be divided in the future. It is used by married couples, partners and even friends buying together.

For the document to be legally binding, it must be signed, witnessed and delivered as a deed. It then sits alongside the legal title registered at HM Land Registry, giving a clear picture of the true ownership position. When properly prepared, a declaration of trust can be relied upon if a dispute ever arises later on.

What Happens to a Declaration of Trust When You Get Married

The document continues to be valid.

If a couple signs a declaration of trust before getting married, the document does not disappear once they tie the knot. It still reflects the ownership shares that were agreed at the time and remains legally binding between the two owners.

Marriage introduces additional legal considerations

Although the declaration of trust remains valid, marriage brings the property within the scope of family law. If a divorce were to take place, the Family Court has wide powers to divide assets fairly between both spouses. The court will look at the declaration because it shows what the couple intended and contributed. However, it is not required to follow it if doing so would lead to an unfair outcome.

In simple terms, the declaration of trust continues to stand as a matter of property law. But if the couple divorces, the court can make a different decision if this is needed to achieve fairness.

FAQs About Declarations of Trust

• What is the purpose of a declaration of trust?

A declaration of trust sets out each owner’s financial interest in a property. It records how much each person has contributed, who owns what share and how the proceeds should be divided if the property is sold. It provides clarity and protection if circumstances change in the future.

• Do all co owners need a declaration of trust?

Not always, but it is strongly recommended whenever contributions are unequal or one person is putting in more money at the outset. It is also useful when parents or family members are gifting funds and want their contribution recognised.

• Is a declaration of trust legally binding?

Yes. When drafted and executed correctly as a deed, it is legally binding between the owners. It can be relied on in civil disputes about ownership shares.

• Does a declaration of trust affect the mortgage?

The document does not change the mortgage responsibilities. All borrowers remain jointly and severally liable to the lender. The declaration simply governs how ownership and proceeds are divided between the owners themselves.

Speak to Our Team

If you are buying together and want clarity about your ownership shares, or if you already have a declaration of trust and want to understand how marriage may affect it, our team can guide you. Our offices in Hythe, Chandlers Ford, Bitterne and Horsham are here to help you move forward with confidence. Get in touch today to discuss your situation and receive clear, practical advice.