Indian Trusts Act 

There is a major notion among many that it is only the elite sector of the
society who can create trusts. However, that is not true! A trust can be
created by not just the high –net worth individuals but even by ordinary
men and women. The provisions of the Indian Trust Act, 1882 (referred to
as “The Act” in this article) governs only private trusts.

Public Trusts are usually governed by state-specific legislation. Eg: The

Maharashtra Public Trust Act, 1950. The Indian Trust Act extends to the
whole of India except the state of Jammu and Kashmir and Andaman and
Nicobar Islands. Further, this act is not applicable to the Waqf, religious or
charitable endowments and to a few others.

Parties in a Trust
 Author/Settlor/Trustor /Donor : The person who wants to
transfer his property and reposes confidence on another for the
creation of the trust.

 Trustee : The person who accepts the confidence for the creation
of the trust

 Beneficiary: The person who will benefit from the trust in the near
future.
Objectives of a Trust in General
The main objective is that the trust should be created for a lawful purpose.
For example, if Mr X had stolen money from a bank and given it to Mr Y
with the intention of giving the money to poor children then, in this case the
trust itself is void as the very main purpose is unlawful.   

So how do we actually understand as to whether the purpose is lawful or

unlawful? The answer to it lies in Section 4 of the Act. As per Section 4, all
purposes are said to be lawful unless it:

 Is forbidden by law

 Defeats the provisions of law

 Is fraudulent

 Involves injury to another person or his property

 Immoral or against to public policy

Who can create a Trust?

According to Trust Section 10 a trust may be created by:

 Every person who is competent to contracts: This includes an

individual, AOP, HUF, company, etc.

 If a trust is to be created by on or behalf of a minor, then the

permission of a Principal Civil Court of original jurisdiction is required.

 Minimum 2 (Two) Persian are Required to create Trust One

Author/Settlor and Second Trustee.
Further, it also depends on the law in force that is prevailing at that
particular point of time and the extent to which the author of the trust may
intend to dispose of his property.

Types of Trusts
 Private Trusts: A private trust is for a closed group. In other
words, the beneficiaries can be identified. Eg: A trust created for the
relatives and friends of the author.

 Public Trusts: A public trust is created for a large group, i.e. the
public in large. Eg: Non-Profit NGO’S Charitable Institutions for the
general public.

Section 5 of the Act states that with respect to:

 Immovable property: A private trust must be created by a non-

testamentary instrument in writing. Further, the non-testamentary
instrument needs to be signed by the author of the trust or the trustee
and has to be registered. However, if the non-testamentary instrument
is created by a will registration is not necessary.

 Movable property: A trust in relation to movable property can be

declared as in the case of immovable property or by transferring the
ownership of the property to the trustee. Hence, registration is not
mandatory.
 TRUST REGISTRATION DOCUMENT FORM

 Trust Name
______________________________________

 Trust Corpus Fund :

 Objective :
 Member
1. Author/Settlor :
Grandfather Name :
Aadhar Card :
Pan card :
Photo :
Mobile No. :
Mail ID :

2. Trustee :
Grandfather Name :
Aadhar Card :
Pan card :
Photo :
Mobile No. :

3. Trustee :
Grandfather Name :
Aadhar Card :
Pan card :
Photo :
Mobile No. :

4. Trustee :
Grandfather Name :
Aadhar Card :
Pan card :
Photo :
Mobile No. :
  Witnesses
1) __________________________
a. Aadhar Card
b. Mobile No.
2) ____________________________
a. Aadhar card
b. Mobile No.

 Trust Deed

Time Taken :- 7 Working Days

Fee :- 15,000/- (Including stamp duty fee)

(Note: Use only Black ball pen,)

Sign PAN form
Stamp