Hi
I am acting for a couple who are settling one of their properties into trust. The property is currently in their joint names as tenants in common in unequal shares. They are the only trustees of the trust.
I am mindful that a trust is not constituted until the assets are transferred into the names of the trustees. In this instance, is it necessary for a new declaration of trust to be drawn up, confirming that rather than holding the property for themselves as individuals on unequal shares, they now hold it in their capacity as trustees? Or will the signing of the trust deed be sufficient, given that the property is already in their names?
I would always recommend some documentation which provides absolute clarity. In this case a deed of assignment of the beneficial interest to the trust, or the new declaration of trust as indicated. On a related note, presumably you have weighed up the pros and cons of having a single trust with joint settlors as opposed to two trusts with individual settlors. I almost always prefer the latter.
There must be a transfer of the equitable interest one way or another, and a new declaration of trust expressly replacing the old one is useful evidence going forward even if the assignment is not in that deed.
Either you need to declare a trust over the property from the outset i.e. as part of your new trust deed (presumably some form of relevant property trust). Or, if you have set up the new trust with a nominal trust fund, then you need to record the addition of the property through a Deed of Addition i.e making it clear that the property is now held on the terms of the trust. This deals with the beneficial interest, the legal interest is already in the names of the trustees, so nothing to do here.