A deed of trust is a legal document which sets out the terms and conditions of who owns property, assets or investments. Also known as a declaration of trust, it is commonly used by joint tenants or property owners.
Joint Ownership
If you are moving in with a friend, relative or partner, it’s a good idea to have a deed of trust put in place to protect your share of the property. It sets out who owns what share of the property and is a legal record of each party’s interest in it. As it is a legally binding document, you should consult an experienced solicitor from a legal firm such as Parachute Law who can advise which type of deed of trust is required and draw one up for you.
The deed of trust will make clear things such as the amount of each owner’s share, what happens if one owner wants to sell in future, if there’s a breakdown in the relationship or if one of you can no longer afford to pay the mortgage. You might want to also have a deed of trust if one of you is putting more funds into the property.
When to draw one up
It’s best to get a deed of trust at the time of purchase, but it can be made at any time during the ownership. If circumstances change, you can amend an existing deed of trust or get a new one drawn up.
Estate Planning, Protection of Assets and Managing Investments
A deed of trust is also useful for estate planning, ensuring your assets can be easily passed to loved ones after your death. In a similar way, you can protect assets if you are a business owner or are very wealthy.
When individuals group together to invest in either a business or property, the deed of trust can lay out the rules over decision-making and sharing out of profits.
In all cases, a trustee is appointed to manage the trust and the assets covered in it.