What is a Deed of Trust?

  • Author: Gemma Thew
  • Posted on: 24th May 2021
  • Posted in: Blog

What is a “Deed of Trust”?

A “Deed of Trust” (also know as a “Declaration of Trust”) is a legally binding document which allows joint owners of a property to specify what proportion each party owns and is responsible for. This can be invaluable for avoiding lengthy, not to mention, costly legal disputes in future and sets you up for living together built on a foundation of mutual understanding.

Who needs one?

According to the latest figures from the Office of National Statistics, the level of cohabitation has increased over the last decade by over 25% meaning more couples are choosing to live together without the default legal framework around shared possessions that covers their married counterparts. There is also a clear trend of higher levels of cohabitation in younger age groups when these relationships tend to be newer and these couples are just starting to get themselves on to the property ladder. Also with rises in property prices consistently outstripping wage increases there has also been an increase in friends coming together, often as a group, to secure that all important first rung on the ladder.

With different parties often able to contribute differing amounts of money into the deposit and monthly repayments, a Deed or Declaration of Trust helps clarify how much of a property is owned by each individual as a result. This may be particularly relevant if you are fortunate to have some financial support from the bank of Mum & Dad in the form of a lump sum towards a deposit. Put simply, anyone purchasing a property with another party could benefit.

Why set one up?

Whomever the parties involved are, it is very important to set clear expectations as early as possible and come to an understanding of where each individual stands, especially when it comes to what is likely to be the largest purchase you have ever made. A deed of trust helps set this out in a clear and legally binding document so that you can concentrate on the most important part of living together – enjoying yourselves in your new home! Avoiding misunderstandings from the outset not only helps you avoid potentially very costly and protracted legal disputes further down the line but also gives all parties peace of mind.

What kind of details are included?

Although the format of a Deed of Trust may vary, they generally include:

  • Figures for the Purchase price of the property, the loan amount and the deposit used
  • How much each party has contributed to the deposit
  • What each party will pay towards ongoing costs including mortgage repayments, bills and any maintenance works required
  • What happens if one party wants to move out or sell their share of the property
  • The percentage each party will own of the property and therefore what they will get from any future sale


The final detail of what is or isn’t included is totally up to you but as ever we at Crosby Woods will be on hand to discuss your goals and priorities so that we can make sure your Deed of Trust fits your unique situation.

Can you cancel or amend them once in place?

As long as all parties agree to any proposed changes then a Deed of Trust can be rewritten or amended at any time.

Due to the nature of these documents, similarities are often drawn between them and Prenuptial agreements (commonly referred to as “Prenups”) but it is important to note that if a couple marry then any existing Deed of Trust is superseded by the Matrimonial Clauses act 1973. If you are considering marriage and still wish the terms of your Deed of Trust to apply then a Prenuptial Agreement should be drafted.

Want to learn more?

For more information on this subject or to speak to a qualified Family Law solicitor, please do not hesitate to contact us on 01273 734 600 or email advice@crosbywoods.co.uk.