There are various legally binding documents involved in home ownership, but what is a Deed of Trust? A Deed of Trust, also referred to as a Declaration of Trust, is a document that outlines how property will be held by more than one owner. You only need a Deed of Trust if the property is going to be held by joint owners.
What Does a Deed of Trust Include?
The Deed of Trust contains important statements, or trusts, that relate to how the assets in the trust should be dealt with. For example, the Deed of Trust might cover things like:
- The intentions for the use of the property
- How rental income might be used or distributed
- Details of who will receive the proceeds of a sale
- The amount of money each party has contributed
- How much each person will contribute towards mortgage repayments
What’s The Purpose of a Deed of Trust?
In short, it’s a way of protecting the interests of everyone who is the joint owner of a property. A Deed of Trust ensures each party get something in return for their investment if the property is sold.
Without a Declaration of Trust, it’s difficult to keep track of what each investor is entitled to. Signing a Deed of Trust is a good way of ensuring that your investment is kept safe.
Another reason why you might sign a Deed of Trust is if you’re buying property as an unmarried couple. Couples who aren’t married or in a civil partnership are not covered by any legal protections, so a Declaration of Trust helps add security.
How to Get a Deed of Trust
We always recommend getting a conveyancer to create your Deed of Trust. This will ensure that it’s legally binding and includes everything you need it to as your conveyancer will tailor the Declaration of Trust to suit your needs.