ASMITA KANITKAR

Constitution Of
Trust
What is trust.??

 Trust is legal entity created under Indian law to hold and manage property for the behold and manage
property for the benefit of one or more individuals
 The trust can be formed for any purpose, including financial security for the beneficiaries
 Under Indian law, a trust is a separate legal entity from its trustees
 The trustees are responsible for administering the trust property and carrying out the settler’s wishes
 They must also account for the trust property to the beneficiaries at regular intervals
 Trusts can create legal contracts between individuals and the trustees, nefit of one or more individuals
How is it formed??

 The Indian Trusts Act of 1882 sets out the rules governing the creation, operation, and dissolution of
trusts in India
 The act applies to both domestic and foreign trusts
 A trust can be created for various reasons, including estate planning, charitable purposes, and business
management
 The Indian Trusts Act 1882 also sets out the rules governing the powers and duties of trustees, the
immunities of trustees from personal liability, and the rights of beneficiaries under trusts
 You should consult a lawyer if you are interested in setting up or managing trust in India
 A lawyer will be able to help you understand the provisions of the Indian Trusts Act 1882 and to provide
you with guidance on how to create or manage a trust effectively
Trust’s Chargeable Interest

 Under the Indian Trusts Act, a trust is created by a settler who transfers property to the trustees to benefit the
beneficiaries
 The settlor retains a chargeable interest in the trust, which allows them to receive income and other benefits
 The trustee manages and distributes the trust’s assets to the beneficiaries
 The trustee must also account for any chargeable interests in the trust
 A trust can have any number of beneficiaries, and these beneficiaries can be individuals, organizations, or
governments
 The Indian Trusts Act does not limit the type of property that can be transferred into a trust
 Any property, including real estate, stocks, and bonds, can be transferred into a trust
 Contact an attorney familiar with this law if you are interested in setting up a trust under the Indian Trusts
Act
Who all can be members??

 The act defines trust as an ‘arrangement’ in which one person (the settler) transfers property to another
(the trustee) intending to benefit the trust estate.
 The trustee can be either natural or juristic persons
 The object of the trust may be any lawful object, and it can be created for any purpose, including for the
benefit of the settler’s descendants
What are the Different Types of Trusts?

 Public Trust:
A public trust is created for the benefit of the public or a particular section of the public. These trusts
are usually set up for charitable or religious purposes, such as the construction and maintenance of schools,
hospitals, or temples. The trustees of a public trust are responsible for managing the trust’s assets and ensuring
that they are used for the benefit of the intended beneficiaries.

 Private Trust:
A private trust is created for the benefit of specific individuals or families. These trusts are usually set
up to protect family assets, such as property or wealth, and can also be used to provide for the education and
welfare of family members. The beneficiaries of a private trust are named in the trust deed, and the trustee
handles managing the trust’s assets and distributing income to the beneficiaries.
What are the Different Types of Trusts?

 Special Trust:
A special trust is created for a specific purpose, such as the maintenance of a park or the care of a pet.
These trusts are usually temporary and are dissolved once their purpose has been fulfilled. The trustee of a
special trust handles managing the trust’s assets and ensuring that they are used for the intended purpose.

 Charitable Trust:
A charitable trust is created for the benefit of the public or a particular section of the public, such as the
poor or the sick. These trusts are usually set up to provide social welfare and are exempt from taxes under the
Indian Income Tax Act. The trustees of a charitable trust are responsible for managing the trust’s assets and
ensuring that they are used for the intended charitable purposes..
What are the Different Types of Trusts?

 Implied Trust:
An implied trust is created when the circumstances of a situation suggest that a trust was intended,
even if there is no formal trust deed. For example, if a person leaves money to a friend with the instruction to
use it for a particular purpose, an implied trust is created, and the friend becomes the trustee of the trust.

 Express Trust:
An express trust is created by a formal trust deed that outlines the trust’s terms and conditions. The
deed identifies the beneficiaries, the trustee, and the trust’s assets. The trustee handles managing the trust’s
assets and distributing income to the beneficiaries according to the terms of the trust deed.
Function of Trust

 A trust is a legal entity created under the Indian Trusts Act. The main functions of a trust are to manage
and protect the interests of its beneficiaries
 Trust can be used to hold assets for the benefit of its beneficiaries, make distributions to them, or manage
their affairs.
 The trustees of a trust are usually individuals appointed by the settler (the person who creates the trust)
with the beneficiaries’ consent
 The trustees have a fiduciary duty to act by the intentions of the settler and protect the interests of the
beneficiaries
 They are also responsible for administering and managing Trusts registration are an important part of
Indian law and play a significant role in estate planning
Function Of each Members
Fundamental Documentation Required for Trust Registration

 Proof related to Identity for Trustor & Trustee such as Aadhaar Card, Voter ID, Passport, Driving license.
 Address Proof related to Registered Office such as Copy of Certificate of Property/Utility Bills.
 No objection certification from the Landlord if the property is rented.
 Trust deed's objective.
 Detail about the Trustee and settlor such as Self-attested copy Id & Address Proof and occupation.
 Trust Deed on Proper Stamp Value.
 Trustee and settlor Photos.
 Trustee and settlor PAN details