What is a Declaration of Trust?
A declaration of trust is a legal document that outlines the ownership and distribution of assets, typically in the context of property ownership. It is used to establish the beneficial ownership of a property, which may differ from the legal ownership as recorded in the land registry.
How are Declarations of Trust Used in Property Ownership?
Declarations of trust can be used in a variety of ways to protect property ownership. For example, they can be used to establish joint ownership of a property, where multiple parties have a shared beneficial interest in the property. They can also be used to transfer ownership of a property on paper, while the legal title remains in the name of the original owner.
It's important to note that the legal title of a property and the beneficial interest are not always the same thing. The legal title refers to the official ownership of a property as recorded in the land registry or Landgate, while the beneficial interest refers to the actual ownership and use of the property.
Declarations of Trust and Wills
In a declaration of trust, the trustee holds the legal title to the property on behalf of the beneficiaries, who have the beneficial interest. This means that the trustee has a duty to manage and maintain the property for the benefit of the beneficiaries, and to distribute the proceeds of the property according to the terms of the trust.
Declarations of trust can also be used in the context of wills and estate planning. For example, a property owner may establish a declaration of trust to ensure that their share of a property is passed on to a specific beneficiary in the event of their death.
Beneficial Interests for Seniors
Declarations of trust can also be used to transfer ownership of a property on paper, while the original Landgate records have the title owner as the same. This can be done by creating a "bare trust", where the legal title is transferred to a trustee, but the beneficial interest remains with the original owner. This can be a useful tool for protecting assets from creditors or legal claims, and for maintaining privacy and confidentiality.
Declarations of trust can also be used to protect the beneficial interests of seniors. For example, a senior may transfer the legal title of a property to a trusted family member or caregiver, while retaining a beneficial interest in the property. This can provide added protection against financial exploitation or forced eviction.
Using Declarations of Trust to Conceal Ownership
While declarations of trust can be used for legitimate purposes, they can also be used to conceal ownership of a property. For example, a property owner may use a declaration of trust to transfer ownership of a property to a nominee or trust, making it more difficult for creditors or legal authorities to identify the true owner. It's worth mentioning that declarations of trusts are not only used for property ownership, but also for all sorts of assets like, stock, bonds, cash, etc.
Conclusion
Declarations of trust are a powerful tool for protecting property ownership and ensuring that assets are distributed according to the wishes of the property owner. They can be used in a variety of ways, from establishing joint ownership and protecting the beneficial interests of seniors, to concealing ownership and protecting assets from creditors.
