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Tax India ›› Indian Law ›› Corporate Law ›› Trusts
The beneficiary can (where there is one beneficiary or if thereare several beneficiaries and all of them agree) direct the trustee totransfer the trust property to him (if there are several beneficiaries toall of them) or to such other person as the beneficiary (or thebeneficiaries may desire).
A beneficiary can also transfer his interest in the trust property andevery person to whom a beneficiary transfers his interest acquires therights and liabilities of the beneficiary at the date of the transfer. But such a transfer can be sought or made by the beneficiary (or thebeneficiaries as the case may be) only if they are of the age of majoritywith sound mind and are not disqualified by any law for the time being inforce in India.
In case the beneficiary is a married woman and the trust property has beenbequeathed to her via the trust to ensure that she would not deprive herself ofher beneficial interest the trust property cannot be transferred at herinstance as aforesaid.
Documents And Accounts Of Trust Property
The beneficiary has a right to inspect and take copies of the instrument ofthe trust, the documents of title relating solely to the trust property,the accounts of the trust property and the vouchers if any by which theyare supported and as well the cases submitted and opinions taken by thetrustee from the court for his guidance in the discharge of his duty.
Protection Of Trust And Trust Property
- Where a trustee has wrongfully bought trust property the beneficiary has aright to have the property retransferred by the trustee or to have suchproperty declared subject to the conditions and safeguards of theinstrument of trust.
- Where a third person acquires the trust property inconsistently with the trust, the beneficiary can file a suit to seek declaration that the property belongs to the trust. But such a declaration cannot be obtained if the third party has obtained the property in good faith by making due payment and without having notice of the trust
- However, in such cases, the beneficiary can claim the money obtained by thetrustee on selling the trust property from the trustee or his legalrepresentatives.
Liability Of The Benificiary
If one of several beneficiaries facilitates or partakes in the breach oftrust committed by the trustee or deceives a trustee and induces him tocommit a breach of trust or fails to take proper steps to protect interestsof other beneficiaries after he becomes aware of the intended or committedbreach of trust, he is liable to such all other beneficiaries. These otherbeneficiaries can impound all the beneficial interest of such liablebeneficiary until the loss caused by breach of trust is compensated.
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