GURU GHASIDAS UNIVERSITY, BILASPUR

SCHOOL OF LAW

PROJECT ON

EQUITY AND TRUST

“DUTIES OF THE TRUSTIES”

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 TABLE OF CONTENTS

1. Introduction
2. Definition of Trustee
3. Duties of a Trustee
4. Conclusion
5. Bibliography

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INTRODUCTION
The word “Trust” is used in common parlance as a word by which a confidence is denoted in
one person by another person.
Illustration:- When it is said that A ‘Trusts’ B with something, it generally means that A has
confidence in B that B would honestly and diligently perform the responsibility entrusted
upon him.
The trustee manages the trust’s assets, a significant responsibility. Since the trustee holds
legal title to the trust property, he or she owes fiduciary duties to the beneficiaries who hold
equitable title. A trustee is personally liable for a breach of his or her fiduciary duties. The
trustee’s fiduciary duties include a duty of loyalty, a duty of prudence, and subsidiary duties.
The duty of loyalty requires that the trustee administer the trust solely in the interest of the
beneficiaries. The duty of prudence requires that the trustee is held to an objective standard of
care in managing the trust property. Subsidiary rules include the duty of impartiality (no
favouritism between classes of beneficiaries), the duty not to comingle trust property and the
trustee’s personal property, and the duty to inform and account to beneficiaries. The trustee
will always have duties, or the trust will become passive and legal title will pass to the
beneficiaries.

DEFINITION OF TRUSTEE

Section 10 says that “every person capable of holding property may be a trustee.”
A Trustee is a person appointed under a Trust to administer the Trust property. A
trustee should be a person who is capable of holding property and who is competent to
contract. A company, being an artificial person created by law, can be a trustee as well. A
Trustee is specifically required to accept or disclaim the trust entrusted upon him, either
expressly or by way of his actions. There can be more than one trustee in a single Trust.

DUTIES OF A TRUSTEE

Trustee has the following Duties:-

1. Duty to Execute Trust-

According to Section 11, the trustee is bound to fulfil the purpose of the trust, and to
obey the directions of the author of the trust, given at the time of its creation, except
as modified by the consent of all the beneficiaries being competent to contract.
However, a trustee is not required to obey any direction which is impracticable, illegal
or manifestly injurious to the beneficiaries.

The explanation to the section says that a trust for payment of debts would include
payment only of the debts of the author of the trust existing and recoverable at the
date of the instrument of trust, or where such instrument is a will, at the date of his
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 death, and in case of interest-free debt, to pay only the principal. Like for example,
where A is a minor son the beneficiary, C being the guardian of A is the trustee of A’s
property.

2. Duty to inform himself of state of trust property-

According to section 12, a trustee is bound to acquaint himself, as soon as possible,
with the nature and circumstances of the trust-property; to obtain, where necessary, a
transfer of the trust property to himself; and (subject to the provisions of the
instrument of trust) to get in trust-moneys invested on insufficient or hazardous
security.

Illustration- The trust property is a debt outstanding on personal security. The

instrument of trust gives the trustee no discretionary power to leave the debt so
outstanding. The trustee’s duty is to recover the debt without unnecessary delay.

3. Duty to protect Title to trust property-

According to Section 13, a trustee is bound to maintain and defend all such suits, and
(subject to the provisions of the instrument of trust) to take such other steps as, regard
being had to the nature and amount or value of the trust-property, may be reasonably
requisite for the preservation of the trust-property and the assertion or protection of
the title thereto.

The trustees have to take proper care in realizing the value of the property. The
Supreme Court observed on the facts of a case:
The property of a charitable and religious endowments or institutions
must be jealously protected because a large segment of the community has a
beneficial interest therein. Sale by private negotiations which is not open to all lead
often gives rise to public suspicion; therefore it should not be permitted unless there
are special reasons to justify the same. Care must be taken to fix the price after
ascertaining the market value for safeguarding the interest of endowment.

4. Duty not to set up title adverse to beneficiary-

According to Section 14, a trustee is under a duty not to set up or aid any title to the
trust property adverse to the interest of the beneficiary.

5. Duty to act carefully-

According to Section 15, a trustee is under a duty to deal with the trust property as
carefully as a man of ordinary prudence would deal with such property if it were his
own; and in the absence to the contrary, a trustee so dealing is not responsible for the
loss, destruction, or deterioration of the trust property.

6. Duty to Conversion of perishable property-

According to Section 16, where the trust is created for the benefit of several persons
in succession, and the trust property is of a wasting nature or a future or reversionary

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 interest, the trustee is bound, unless an intention to the contrary may be inferred from
the instrument of the trust, to convert the property into property of a permanent and
immediately profitable character.

7. Duty to be impartial-
According to section 17, where there are more beneficiaries than one, the trustee is
bound to be impartial, and must not to execute the trust for the advantage of one at the
expense of another.

Illustration- A, a trustee for B, C and D, is empowered to choose between several

specified modes of investing the trust property. A, in good faith chooses one of these
modes. The court will not interfere, although the result of the choice may be to vary
the relative rights of B, C and D.

8. Duty to prevent waste-

According to Section 18, where the trust is created for the benefit of several persons
in succession and one of them is in possession of the trust property, if he commits, or
threatens to commit, any act which is destructive or permanently injurious thereto, the
trustee is bound to take measures to prevent such act.

9. Duty to furnish accounts and information-

According to Section 19, a trustee is under a duty-
a) To keep clear and accurate accounts of the trust-property, and
b) At all reasonable times, at the request of the beneficiary, to furnish him with
full accurate information as to the amount and state of the trust-property.

CONCLUSION
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It is said that the relation of Trust is like a glass. Once broken, it is never the same as before.
By a prima facie observation of the Indian Trust Act, it can be seen that apart from the legal
aspects, the duties and powers provided in the Act intend to preserve the delicate relation of
trust, so that the trust may be kept, and the intention with which the trust is formed may be
fulfilled. Therefore, here we may conclude with the duties and powers of a Trustee as
provided for in the Indian Trust Act, 1882.

BIBLIOGRAPHY

Referred websites-

 www.lawordo.com
 www.blogipleaders.in
 www.lawtimesjournal.in