Declaration of Trust vs Deed of Trust vs Deed of Assignment

[Madmax86]

• Declaration of Trust
• Deed of Trust
• Deed of Assignment

The three are sometimes used interchangeably.

Can someone please explain the differences?

This article states a declaration of trust is the same as a deed of trust - "A Declaration of Trust (also referred to as a Deed of Trust) is..."

This article suggests a deed of assignment is different to a deed of trust.

So based on those examples, one would conclude that a Declaration of Trust is the same as a Deed of Trust but different from a Deed of Assignment

[Lawcruncher]

When referring to land, a declaration of trust and a trust deed usually mean the same thing. The technical difference is that a declaration of trust can be made orally or in writing whether by deed or otherwise. A deed of trust is a declaration of trust made by deed.

There are lots of words referring to the transfer of property (whether land or not). "Assignment" is a word which tends to be used when no other specific word is available such as "conveyance" for unregistered land, "transfer" for registered land, "assent" for a transfer of property by personal representatives to beneficiaries. "Assignment" is used where a beneficial interest in land is transferred, for example by parent to child. A deed of assignment is an assignment made by deed. Subject to some exceptions, all assignments of beneficial interests in land must be made by deed.

It is important to distinguish between the thing you do (e.g. declare a trust or assign an interest) and the means by which you do it (e.g. an instrument such as a deed). The label attached to a document is not important though hopefully it will give you an idea of what sort of document it is. What is significant is what the document does. Thus, an assignment (the document) may contain both an assignment and a declaration of trust (the things your are doing). An assignment may give rise to a trust. An instrument drawn up in the form of a declaration of trust may create or assign a beneficial interest.

So, while a declaration of trust and an assignment are conceptually two distinct things, one may lead to or involve or the other.

[Madmax86]

Thank you that is very helpful.

Out of interest, what is your background? Were you a lawyer in a previous life maybe?

[Lawcruncher]

Were you a lawyer in a previous life maybe?

I was indeed.

[pilman]

Would this Deed of Trust also be an assignment?

DEED OF TRUST

This Deed of Trust is made on the FIRST day of September 2020 between NAMES and ADDRESSES (‘the Donor’ which term, where two persons are named above, shall include both of them) of the first part and the Donor and ONE OTHER PERSON WITH ADDRESS (hereinafter together called ‘the Original Trustees’) of the second part.

The Donor as the legal and beneficial owner hereby irrevocably transfers for no consideration in money or money’s worth the beneficial interest in the leasehold estate of the flat at ADDRESS (registered under title number ???????? and hereinafter referred to as “the Property”) to the NAMED Family Trust for the Original Trustees to hold for the Beneficiaries upon the trusts hereinafter declared.

The Beneficiaries of the Family Trust with their respective shares are shown below:

1. FIRST NAMED PERSON 40% share in the Property
2. SECOND NAMED PERSON 30% share in the Property
3. THIRD NAMED PERSON 30% share in the Property

‘Trustees’ means the Donor and the other Original Trustee named above and the Trustee or Trustees for the time being hereof to be appointed by a majority of the Original Trustees agreeing to such appointment.

‘Trust Property’ means the property as the Trustees shall from time to time and at any time have at their disposal and save where the context does not allow, the singular shall include the plural and the masculine shall include the feminine and vice versa.

It is intended that this Trust shall be irrevocable.

The Trustees shall hold the Trust Property upon the following trusts:

The Property shall be held by the Trustees on bare trust for the absolute benefit of the Beneficiaries and if more than one in the shares specified.

Section 31 of the Trustee Act 1925 shall not apply to the same and whilst any Beneficiary entitled to income under the Trust is a minor the Trustees shall pay or otherwise apply for or towards his maintenance, education or benefit so much of the income from his share in the Trust as the Trustees may in their absolute discretion think fit and the Trustees shall retain the balance of any income on trust for that Beneficiary absolutely and until he shall attain the age of majority the Trustees shall invest the same and the resulting income therefrom in investments by law authorised and shall hold the same as an accretion to the said balance.

Provided Always that so long as any one of the said Beneficiaries has not attained the age of majority the Trustees may pay or apply as aforesaid any such balance or accretion as if it were income arising in the then current year.

The provisions of section 32 of the Trustee Act 1925 shall not apply but the Trustees shall have the power to pay or to apply the whole or such part of any of a beneficiary’s share in the capital of the Beneficiaries’ Fund subject to these trusts, as the Trustees shall think fit for or towards the advancement maintenance education or benefit of that beneficiary and including the payment of inheritance tax.


Powers of Trustees

The Trustees during the minority of any of the Beneficiaries shall have the following powers:

The Trustees shall have the same unrestricted powers as an absolute beneficial owner to sell the Property, to invest trust monies in any other property (whether producing income or not) and to vary such property, including the power to effect and pay premiums on policies of life or other insurance and in addition power to purchase freehold or leasehold property for occupation by any Beneficiary under these trusts.

These trusts are to be governed by and construed in accordance with the laws of England and Wales.

Signed and Delivered as a deed by
DONOR 1


Signed and Delivered as a deed by
DONOR 2


Signed and Delivered as a deed by
TRUSTEE

All in the presence of

Witness Signature:

Name:

Address:

[Lawcruncher]

There does seem to be an assignment in there somewhere, but the drafting is somewhat confused. Would you like a detailed commentary?

[pilman]

Based on your experience that would be appreciated, as long as this will not hi-jack the original thread.

A more effective Deed to achieve the same objective can be used, since this is for my own purposes.

[Lawcruncher]

Comments in red refer to the preceding words in green

This Deed of Trust is made on the FIRST day of September 2020 between NAMES and ADDRESSES (‘the Donor’ which term, where two persons are named above, shall include both of them Not really necessary) of the first part and the Donor and ONE OTHER PERSON WITH ADDRESS (hereinafter together called ‘theOriginal Trustees’ ) of the second part.

The Donoras the legal and beneficial owner These words have no legal effecthereby irrevocably Not necessary transfers Not wrong but "assigns" is the customary word for no consideration in money or money’s worth Not necessary the beneficial interest in the leasehold estate of the Delete flat at ADDRESS (registered under title number ???????? and hereinafter referred to as “the Property”) to the NAMED Family Trust for Delete as a trust is not an entity the Original Trustees to hold for the Beneficiaries Not defined. If there is an existing trust then rather than refer to the beneficiaries you say "upon the trusts hereinafter declared by a deed dated etc"

The Beneficiaries of the Family Trust with their respective shares are shown below:
1. FIRST NAMED PERSON 40% share in the Property
2. SECOND NAMED PERSON 30% share in the Property
3. THIRD NAMED PERSON 30% share in the Property
See above

‘Trustees’ means the Donor and the other Original Trustee named above and the Trustee or Trustees for the time being hereof to be appointed by a majority of the Original Trustees agreeing to such appointment. It is not clear why we have this definition. The interest is being trnafreered to the Original Trustees so why do e also have "Trustees"?

‘Trust Property’ means the property as the Trustees shall from time to time and at any time have at their disposal and save where the context does not allow, the singular shall include the plural and the masculine shall include the feminine and vice versa. This deinition doesnot seem to achieve anything.

It is intended that this Trust shall be irrevocable. Unnecessary.

The Trustees shall hold the Trust Property upon the following trusts:

The Property shall be held by the Trustees on bare trust for the absolute benefit of the Beneficiaries and if more than one in the shares specified. If we are saying the property is held on already existing trusts this is not needed.

Section 31 of the Trustee Act 1925 shall not apply to the same and whilst any Beneficiary entitled to income under the Trust is a minor the Trustees shall pay or otherwise apply for or towards his maintenance, education or benefit so much of the income from his share in the Trust as the Trustees may in their absolute discretion think fit and the Trustees shall retain the balance of any income on trust for that Beneficiary absolutely and until he shall attain the age of majority the Trustees shall invest the same and the resulting income therefrom in investments by law authorised and shall hold the same as an accretion to the said balance.

Provided Always that so long as any one of the said Beneficiaries has not attained the age of majority the Trustees may pay or apply as aforesaid any such balance or accretion as if it were income arising in the then current year.

The provisions of section 32 of the Trustee Act 1925 shall not apply but the Trustees shall have the power to pay or to apply the whole or such part of any of a beneficiary’s share in the capital of the Beneficiaries’ Fund subject to these trusts, as the Trustees shall think fit for or towards the advancement maintenance education or benefit of that beneficiary and including the payment of inheritance tax.

Powers of Trustees

The Trustees during the minority of any of the Beneficiaries shall have the following powers:

The Trustees shall have the same unrestricted powers as an absolute beneficial owner to sell the Property, to invest trust monies in any other property (whether producing income or not) and to vary such property, including the power to effect and pay premiums on policies of life or other insurance and in addition power to purchase freehold or leasehold property for occupation by any Beneficiary under these trusts.

Not applicable if the beneficaries are of full age and (as appears to be the case) entitled absolutely

These trusts are to be governed by and construed in accordance with the laws of England and Wales.

*

If you can confirm the existing position and where you want to get to, then I can say what document is needed and what it needs to say.