Professional Documents
Culture Documents
To keep aside part of the wealth for the benefit of Dependents during the lifetime of
the person and after
To ensure proper care of the wealth due to mental incapacity, physical disability,
insufficient age etc. of the Dependents
To ensure effective control during the lifetime & after as per the wishes of the
person.
Trust is a vehicle under which wealth is transferred from the original owners
and is held by the person to whom it is transferred for the benefit of others
Types of Trusts
Depending upon for whose benefit the trust has been created, the trusts are
generally classified as:
Public Trusts
Private Trusts
Private Trust
The beneficial interest is vested absolutely in one or more individuals who
are ascertainable
Public Trust
Members of an uncertain and fluctuating body and the Trust itself is of a
permanent nature and indefinite character
A common example is a Trust that provides for the accumulation of income and
capital for specified Infants.
Subject to their maintenance during this period, the accumulation must be handed
over to them upon their attaining a specified age or, in the case of a female
beneficiary, upon marriage.
The law relating to Private Trusts and Trustees is codified under Indian Trusts
Act, 1882
The person who reposes or declares the confidence is called the “Author of the Trust”’
The person for whose benefit the confidence is accepted is called the “Beneficiary”
The “Beneficial Interest” or “Interest” of the beneficiary is his right against the Trustee
as owner of the Trust property’ and the instrument, if any, by which the Trust is
declared is called the “Instrument of Trust”
Subject to the provisions of Section 5, a Trust is created when the Author of the Trust
writes
Author can deliver the movable property to the Trustee with the necessary oral
directions without a formal document or written agreement
Advisable to execute a Trust Deed and have it signed by the Author and the
Trustees in the presence of a witness to avoid any subsequent disputes
There is no mandatory requirement to register a deed of Trust for movable
property
Every person capable of holding property may be a trustee; but, where the trust
involves the exercise of discretion, he cannot execute it unless he is competent
to contract.
The trustee is required to fulfill the purpose of the Trust and to obey the
directions of the Author of the Trust given at the time of its creation, unless
modified by the consent of all the Beneficiaries
Where the Trust property consists of money, the Trustee is bound (subject to any
direction contained in the instrument of Trust) to invest money in the following
securities and no others:
Trust is extinguished