How To Form A Trust

7/23/2019 How To Form A Trust

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trust| By VakilNo1

How To Form A Trust

Page Contents [hide]

Definition of Trust

Requirements of a Trust

Creation of TrustDeed of Trust

Declaration of Trust

Testamentary Trust

Who can Create a Trust
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Trust, Private and Public

Who can be a trustee

Definition of Trust

Creation of a trust, particularly relating to an immoveable property is also a species of transfer of property.

Trust is defined in section 3 of the Trust Act, 1882 as an obligation annexed to the ownership of propertyand arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for

the benefit of another or of another and the owner. In simple words it is a transfer of property by the owner

to another for the benefit of a third person along with or without himself or a declaration by the owner, to hold

the property not for himself and another.

Requirements of a Trust

A trust is not a contract of agency to hold the property, as in that case there would be no transfer of the

property. In trust there is a transfer from the owner to the trustee subject to certain terms and conditions.Bailment is also a kind of trust, but in bailment also there is no transfer of any interest in the property, but only

a transfer of possession without ownership. Thereof, a trust is essentially a transfer of property by one to the

other to be held by the other for the benefit of some person or for carrying out some object. It is no also a

sale because a sale cannot be conditional and in sale there is consideration which is absent in a trust. The

purpose of a trust must be lawful, that is,

It should not be forbidden by law.

It should not be of such nature that, if permitted it could defeat the provisions of any law.

It should not be fraudulent.

It should not involve or imply injury to the person or property of another or

It should not be such as would be regarded by a court as immoral or opposed to the public policy.

Where a trust is created for two purposes one of which is lawful and the other is not and the two purposes

cannot be separated, the whole trust is void.

Creation of Trust

A trust of immoveable property can be created by two ways. One by a non-testamentary document and

another by a testamentary document such as a will. In other words, a trust regarding a immoveable propertycannot be created orally but it must be by a document duly registered. A trust of a moveable property can be

created either by a document or delivering the property to the trustee with necessary oral directions. If the

directions are given in writing it would amount to a trust by a non-testamentary document which may or may

not be registered.

A person who creates a trust is called the settlor, the person to whom the the property is transferred on trust

is called a trustee and the person for whose benefit the property is transferred is called the beneficiary or

cestuique trust .

Deed of Trust

A trust relating relating to an immoveable property is required to be created by a document and such


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document must state and contain five essential things with reasonable certainty namely :

the intention on the part of the author of the trust or settlor to create a trust.

the purpose of the trust.

the beneficiary.

the trust property, and

transfer of the property to the trustee.

Declaration of Trust

A trust can also be created by the author himself declaring that he would hold the property, not as owner, but

as a trustee for the benefit of some person or persons including himself and in that case the transfer of

property is not necessary as one need not transfer his property but in such a case the declaration of trust is by

the owner and he alone should be the trustee. Such a declaration would, however, require registration under

the Registration Act.

Testamentary Trust

A trust can also be created by a testamentary document that is by Will and the same conditions as mentioned

in Section 6 of the Trust Act are required to be fulfilled. such a Will also does not require registration

A trust is also created :

by application of employed trust or

as a constructive trust or

as derivative trust.

But they are created by fiction by of law and cannot be subject matter of conveyancing

Who can Create a Trust

A Trust can be created by any person competent to contract or even by a manner with the authority of a

competent court and respect of any property which is transferable and over which the author of the trust has

dispossessing power.

Trust, Private and PublicA Trust may be Private and Public.

When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants

for any legal person and who is capable of holding property, it is a private trust.

When the purpose of the trust is to the benefit the public or any section of the public, it is public trust.

Who can be a trusteeA trustee can be any person that is, an individual or a corporate body or a corporate sole, capable of holding

property and competent to contract. and he must accept the trust.


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Displaying 45 Comments

Have Your Say

1. manohar malkanisays:

April 3, 2013 at 4:42 pm

how do we complain in case a registered trust is not following proper rules

2. tjjohnsays:

June 2, 2013 at 1:18 pm

This is an informative article. However it is not very clear whether a major beneficiary ( Or other

beneficiaries )of a private trust be the trustees of the Trust.

As a case example. I would like to create a private trust of all my properties and be the trustee myselfduring my life time. Can I appoint one of my sons as a trustee after my death.

Thanks

tjjohn

3. praveensays:

June 24, 2013 at 2:04 pm

i want to open a unit of my trust with other name ,is it possible ?

4. MIR NUR ALAMsays:

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Landmark SupremeCourt Judgment on

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New lawyers mayget 5000 as st ipend

20Like
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5/13



June 28, 2013 at 4:53 pm

Please send the guide line to provide the better opertunately of skill development for the young boys &

girls in the rural areas.

5. pradeep kumar jayantsays:

July 2, 2013 at 9:43 pm

A executed a will for wife and son for her/his life time and thereafter creat a trust for public charity.

Will not execute so fat. Meanwhile the property was sold by successor of author to third person by

regd.saledeed. What happen reg. property and trust deed.

6. Jastej S (Team Vakilno1)says:

July 3, 2013 at 12:19 pm

The executor of the Will or the beneficiary can file a case for the recovery of property.

7. Ranjan Agraharisays:

August 21, 2013 at 12:55 pm

Sir, I like to start a Public Charitable Trust For My Home Towm, if possible pls mail me Sample Trust

Deed.

Thank you,

Ranjan Agrahari

8. Narasimhan Gopalakrishnansays:

October 5, 2013 at 5:44 pm

Sirs

I came across an instance.

The Deed of Trust did not have any express Clause that it could create ,float or declare a Trust.

But this Trust , taking refuge under the rights of dispossession/alienation/disposal/demising, by a deed

of declaration floated a Trust

Is this New Trust valid .Whether its corpus fund and assets woould be subject to its Management, OR

THE MANAGEMENT of the original Mother-Trust ?

Kindly help us design our further course pending for more than almost a year

9. Abhisek Anandsays:

October 22, 2013 at 11:36 pm

Sir, I like to start a Public Charitable Trust in My Home Town[in public place(Dewalay)], if possible

please mail me Sample of Trust Deed and required other docoments.

Thank you,
http://n.a./http://www.vakilno1.com/legalviews/know-file-police-complaint.htmlhttp://yourwebsite.../http://yourwebsite.../http://yourwebsite.../


6/13



Abhisek Anand

10. Basntkumarsays:

November 21, 2013 at 4:35 pm

Where private Trust are Registered?

11. deepak tewarisays:

January 9, 2014 at 10:53 pm

sir,

I want to create a trust for the purpose to run a school.

pls if possible mail me the format for trust deed

Thanks

with regards

12. Shakeelsays:


Sir, I would like to start a religious Trust in my city to comunity services to my comunities but i dont

have any place to start. I am thinking to form a trust and ask my comunities to donate so that land can

be buy and other facilities can be create to offer to my communities free of cost. Please mail me

Sample of Trust Deed and required other docoments so that deed can be made registered the same.

Thank you,

Shakeel

13. asokan.Lsays:

February 8, 2014 at 4:05 pm

hi,

i need model of trust deed in tamil. pls send me to my mail id.

thanks

regards

asokan

14. S.Subramaniansays:

http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../


7/13



Can a foreigner be a trustee for the Indian Trust

15. shylajasays:

March 23, 2014 at 2:35 pm

SIR,

i need model of succession op in english, please sent to my email id

16. NEERAJ SHOREWALAsays:

March 26, 2014 at 1:21 pm

hi,

i need model of trust deed in hindi/english. pls send me to my mail id.

thanks

regards

17. amitsays:

March 30, 2014 at 9:40 pm

I AMIT CHANDNA START A TRUST IN THE PUBLIC INTEREST. PL SEND ME PAPER

FORMALITIES

18. Sagar Patil,says:

April 4, 2014 at 11:19 am

I would like to start trust for public interest at my village. I request you to guide me in following ares:

1)Can trust be formed by contribution of my own money and without any immovable property?

2)Can trust raise donation?

3)Sample of trust deed in English

4)Legal formalities in Karnataka

With Regards

SAGAR PATIL

19. raghubsays:

April 26, 2014 at 7:15 pm

Dear sir, can I start public trust with out immovable property.. Is private charitable trust also need

property ?

20. jagjeet K.Rehelsays:

April 28, 2014 at 9:02 pm

i have been searching for the text for trust it very good it contained all the short points which helps easy

to understand and ready material for forming of a trust.
http://na/http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://www.suryahoilidaysinn.com/


8/13



21. sayeedsays:

June 3, 2014 at 2:13 am

Sir. My friends would like to start trust for the people those need money for medical expenditure.

Suggest me the requirments to start the trust

22. shanaya singhsays:

June 7, 2014 at 7:03 pm

what is difference btw religious and normal trust how can we open a religious trust and how many

people r involved in it and how many trustees can take part to form a big religious trust

23. Ammad Ferozesays:

June 30, 2014 at 1:29 am

Sir, I like to start a Charitable Trust School For My Home Town, if possible pleas mail me Sample

Trust Deed & guide me regarding all the formalities regarding this matter

24. Aruna Mittalsays:

July 5, 2014 at 9:36 am

Sir,In my fathers own house a trust for Art development is going to be operational shortly. I want to

know whether there is any risk regarding the house property in future. is my father has to take any

preventive step to protect his property, If yes please guide me

25. RAJESHsays:

July 11, 2014 at 10:55 am

where i can contact to making own trust . can u give me the some office no- who is the best in Delhi?

thanks

26. ARUN P Tsays:

August 2, 2014 at 12:07 am

Sir,

We are a group of people who studied in a school. We would like to form a public trust to do lot of

activities which can be benefited for the society. Please advice.

1)Does the trust requires an office?

2)Can trust raise donation?

3)Sample of trust deed in English

4)What other advices can be given on this thought.

Thank You
http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../


9/13



Arun P T

27. shiv shankar kumarsays:

August 3, 2014 at 2:43 pm

can u pls tell us the procedure for the formation of private trust in bihar? we run a institute for tailoring,

painting,beautician etc. in patna. Do we need to have a property for the formation of private trust?Who can be a trustee? we want to form the trust for getting our institute regd with NCVT. thanks

28. m.sudhakarsays:

August 12, 2014 at 2:12 pm

i want to build a one sai baba temple in my own land, which want to be trust is it possible, if its what is

the procedure to create a trust kindly guide me. thanks

29. r c lalwanisays:

August 21, 2014 at 12:26 pm

Sir,I am holding title on piece of land situated on Khasra No 775/1 ad measuring 1121 sq ft at

Bilaspur.Another gentleman who is holding title of land situated at 766/21 has placed Board on my plot

stating that my land belongs to him.Because of this Board placed on my plot, my sell agreement with

THIRD party is not moving ahead.What remedy i have (I)for removal of this Board from my plot and

(ii)for the cancellation of that contract as this has become time barred too but party is insisting to go

ahead with the agreement as it is to their advantage.Kindly advice me how to deal these two separate

and independent issues.Also please suggest me a senior Civil case expert at RAIPUR/Bilaspur

30. sanatansays:

August 23, 2014 at 1:10 pm

Sir we are in the process of forming trust in maharastra but it is on the process. To whom I contact to

know about how much it is proceed. Please tell

31. Jayesh Patelsays:

September 8, 2014 at 8:05 pm

i want to open private school. so how to make trust.

32. sandip R.Bhuvasays:

September 15, 2014 at 7:51 pm

I put an application for the registration of public trust in the office of the assistant charity commissioner.

I want to establish a public temple. I create a trust deed but assistant commissioner says that religious

trust can not be created by trust deed & that type of trust created by constitution, i see the b.p.t.

act.1950 but there is no any provision in section 2(7A) of b.p.t. act relating to instrument of trust hence

give suggestion.
http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../


10/13



33. p.k.singhsays:

October 2, 2014 at 7:02 pm

Dear sir,

I want to form a trust for benefit of female education and skill development for underpriviledged mass

beside a business concern for earning benefit to meet the expenses required.

your guidance awaited for the purpose

34. Biswajit Purohitsays:

October 17, 2014 at 12:52 am

Respected Sir.

Whom to write to make trust the famous Maa Bindhyabasini Shrine,DVill-Sankrida Distt-Bargarh

State- Odisha. Which has been declared as state tourist destination recently.

35. SAIRAMsays:


We along with our family members would like to start a private trust to provide medical relief and

education for the poor.Hence we would like to know whether we require immovable property or with

monetary funds alone it would be possible.

36. 20 Ways to Help Your Folks (And Other Older People)says:


[] 17. Recommend a trust. It saves money and time, with less time and expenses probating a will.

(Although a wills not a bad idea, either.) []

37. Geeta dangesays:


i want to create

a trust for the purpose to run a school

pl if possible mail me the formate for the trust deed

thank you

with regards

38. RAJAsays:

December 6, 2014 at 12:19 pm

Sir, I like to start a educational Charitable Trust. if possible pleas mail me Sample Trust Deed & guide

me regarding all the formalities regarding this matter in tamil

39. RAJAsays:

http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://yourwebsite.../http://midlifefinance.com/2014/11/20-ways-to-help-your-folks-and-other-older-people/http://yourwebsite.../http://yourwebsite.../


11/13



sir,i like to start a new edcational chartable trust in tamilnadu.i need model trust deed in tamil pls send

in my mail ID thank you with regards.

40. RAJESH KUMARsays:

December 22, 2014 at 11:00 am

SIR I LIKE TO START A NEW TEMPLE IN TAMILNADU..I NEED SOME FINANCE HELPPLS HELP MECONTACT NO-09900932935,09902030361,09742240141,09900934531

SRI GANGAI AMMAN TEMPLE.

41. dhirendra kumar dubeysays:


I want start s pvt school, how to make trust.

42. adv pravinsays:


where to register private trust ? and under which provision

43. S.M. Mushahidsays:

January 17, 2015 at 8:53 am

Firts of all Thanks lot. Its very concise &nice. Still want to know difference between starting of schoolunder Charitable trust is good or Educational Trust. Please guide & help us.

44. S.M. Mushahidsays:

January 17, 2015 at 8:57 am

Firts of all Thanks lot. Its very concise &nice. Still want to know difference between starting of school

under Charitable trust is good or Educational Trust. other formalities relating Please guide & help us.

45. dayanandsays:


Rural part of Karnataka v do have Arya samaj from las 25years v want form a trust this will be very

grtful for future activities plz guide us how to form trust WHT r all the formalities

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