What is the Difference Between a Trust Deed and a Declaration of Trust?
Squiggle Support Team
Last Update 3 months ago
INTRODUCTION TO TRUSTS
Under English law, a Trust is a legal arrangement where one party (the "Settlor") transfers assets (money, property, stocks, personal belongings, etc.) to another party (the "Trustee") to manage and hold for the benefit of another individual (the "Beneficiary").
In addition to estate planning purposes, Trusts can be used for asset protection, tax planning, or financially supporting family members who cannot manage their finances.
WHAT IS A TRUST DEED?
This legal document establishes the Trust and contains the terms and conditions of a Trust arrangement.
Usually, it will determine how the Trustee will distribute the Trust assets.
The Trust Deed is vital in ensuring that the assets are managed and handled according to the Settlor's instructions.
WHAT IS A DECLARATION OF TRUST?
A Declaration of Trust is regarded as a simpler, more informal version of its comprehensive counterpart, mainly clarifying ownership rights and shareholding in a jointly owned property.
However, it can also include other assets held in Trust, such as financial assets or personal property.
INTERCHANGEABILITY
In real life, both 'Trust Deed' and 'Declaration of Trust' tend to be used interchangeably. For example, a Declaration of Trust might sometimes include more specific details.
In any case, if a Declaration of Trust contains extensive instructions and provisions, it must meet the criteria of a Trust Deed to be considered fully legally effective.
Need to know more or you’d like to discuss your options?
If you're not clear about the nuances of Trust Deeds and Declarations of Trust, we'd be happy to clarify the options for you and help you determine which legal instrument is the best way to manage and protect your assets as part of your estate plan.
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