Trusts

Private Trust

Private trusts are governed by the Indian Trusts Act, 1882. This Act isapplicable to the whole of India except the State of Jammu and Kashmir andthe Andaman and Nicobar Islands. That apart this Act is not applicable tothe following:

1. Waqf
2. Property of a Hindu Undivided Family's.
3. Public or private religious as charitable endowments.
4. Trusts to distribute prizes taken in war among the captors.

Trustee / Beneficiary Of A Private Trust

• Any person who is capable of holding property can be appointed a trustee.
• A person has capacity to hold property if such a person is capable ofadministering the property effectively and efficiently with ordinary prudence.Depending upon the nature of the trust, if trustee is required to play apassive and role without any scope of discretion a minor may as well beappointed as trustee
• However, where the trust involves exercise of discretion such as trustrequiring sale of property or its investment, the trustee should be of theage of majority, of sound mind and should not be disqualified by any law.
• A Corporation, a company or association of persons may as well be appointedas trustee.

Beneficiary OF A Private Trust

• Every person capable of holding property such as a human being,corporation, Company and even a state can be made beneficiary of a trust.
• An unborn person can also be made beneficiary.
• However, a proposed beneficiary is not bound by the desires of the personcreating the trust. Such a proposed beneficiary can renounce his interestunder the trust by either making a disclaimer addressed to the trustee orby setting up a claim inconsistent with the trust.

Rights OF Beneficiary

• Unless the trust instrument expresses a different intention, abeneficiary has a right to the rents and profits of the trust property.
• Again, the beneficiary has the right to ensure that the intention of theauthor of the trust is specifically executed to the extent of thebeneficiary's interest therein.
• Accordingly, a beneficiary can compel the trustee to perform any particular act of his duty or can as well restrain the trustee from committing any contemplated or probable breach of trust.
• If no trustees are appointed or all the trustees die, disclaim or aredischarged or where for any other reason the execution of a trust by thetrustee becomes impracticable, the beneficiary can file a suit for theexecution of the trust. In such a circumstance, the court executes thetrust until a trustee is appointed for the same.