Trust

Meaning of Trust:

Trust is a special form of organization. The first law on Trusts came into force in India in 1882 known as the Indian Trusts Act, 1882. Section 3 of the Indian Trust Act, 1882 defines the term ‘trust’ as:-

  1. an obligation annexed to the ownership of property and
  2. arising out of confidence reposed in and
  3. accepted by the owner or declared and accepted by him,
  4. for the benefit of another or of another and the owner.

BENEFITS:

  1. A trust gives you greater protection than a will against legal action from anyone who is unhappy with the distribution of assets and decides to challenge it.
  2. A trust can provide a way to avoid or reduce estate taxes because assets and property placed into a trust are not subject to these taxes.
  3. Trusts can minimize possible conflict between heirs when an estate is being settled.
  4. Trusts can help you manage your affairs if you become unable to do so. The trustee can take over managing, not only your affairs, but also those of any beneficiaries you've been providing for.

Types of Trust:-

  • Simple and Special Trusts.
  • Oral and Written Trusts.
  • Charitable or Religious Trust.
  • Express and Implied Trusts.
  • Public and Private Trusts.
  • Revocable and Irrevocable Trusts.
  • Public-cum-Private Trust.
  • Constructive Trust.
  • Resulting Trust.
  • Executed and Executory Trust.

Various terms related to Trust:

  • The person who reposes or declares the confidence is called the ‘author of the trust’
  • The person who accepts the confidence is called the ‘trustee’
  • The person for whose benefit the confidence is accepted is called the ‘beneficiary’
  • The subject matter of the trust is called ‘trust property’ or ‘trusts money’
  • The ‘beneficial interest’ is beneficiary’s right against the trustee as owner of the trust property, and
  • The instrument declaring the trust is called the ‘instrument of trust’.

Other Information related to Trust:

Trusts and charities are under the Concurrent List in the Constitution of India. Each state is free to frame its own laws with regard to trusts. The Centre can also frame an all-India law, which will prevail wherever a state law has not been passed. However, the Centre has not passed any law on charitable trusts so far.

Private Trusts are formed for the benefit of family members, or a very small set of known persons. A private trust is not a charitable trust. Private trusts are governed by Indian Trusts Act, 1882. This Act does not apply to public trusts.

A public trust is ideal when a person wants to dedicate their own property to a specific cause for all times to come. It is not so suitable when you want to raise funds from the public for the trust’s activities.

The essential difference between a private and a public trust is that in the former, the beneficiaries are definite and ascertained individuals or individuals who within definite time can be definitely ascertained, but in the latter, the beneficial interest must be vested in an uncertain and fluctuating body of persons either the public at large or some considerable portion of it answering a particular description.

Requirements & Services

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Requirements For Registration:

  1. Proposed Name Of Trust.
  2. Proposed Objectives.
  3. Names of atleast 2 Persons having interest for constituting such entity.
  4. Contact Details of such persons.
  5. 6 Photos of each Person.
  6. Identity and Address Proof of Proposed Persons

Document Provided to You After Registration:-

  1. Trust Deed

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