Trusts and Transfers

Property ownership arrangements

Declarations of Trust and transfers of equity both deal with the ownership arrangements of a property.

Declarations of Trust

A declaration of trust, also known as a deed of trust, is a legally binding document that typically sets out the financial arrangements between joint owners of a property and/or anyone else who has a financial interest in the property.

Declarations of trust are commonly used when individuals are buying property jointly. They can be tailored to suit many different circumstances. You will have a lot of flexibility to create the arrangements that are right for you. Ownership does not necessarily need to be split in the same proportion as financial contributions.

Transfer of Equity

Equity is the legal term for how much of the property you own. Or, to put it another way, the value of the property minus any outstanding mortgage. A transfer of equity is when a jointly owned property is transferred from one of the original owners to the other remaining owner or owners, or when a single owner adds one or more people to the ownership of the property. It is commonly known as adding or removing someone from ‘the deeds’ of a property.

The most common reason for a transfer of equity is to change the ownership of a property following separation or divorce, however it is not the only reason. You may want to co-own your property with a new spouse or cohabiting partner. Or you might want to give part-ownership of a property to a child or another family member, perhaps for tax efficiency as part of your estate planning. Whatever your circumstances, your lawyer will guide you through the process step-by-step.