A trust deed (a legal contract between the settlor and the Trustee) is registered with the registrar of the respective jurisdiction in order to legalize it. Once the registrar approves the trust deed, the Trust comes into effect as a legal medium for lawful distribution of the settlor’s assets among the beneficiaries.
Frequently Asked Question
- How Do Trusts Work?
As a legal arrangement, a trust involves holding assets for others (the beneficiaries) on behalf of the trustee. In most trusts, there is an expiration date, or vesting date, when they are wound up. However, dissolving a trust is a process that allows you to wind the trust up before it reaches its vesting date.
2. Registration for Trust is Mandatory?
Neither a private trust under a Will nor a public trust under a Will is required to register their trust. If the trust is in relation to moveable or immovable property, trust registration can be arranged regardless of whether the trust is under a Will or an intervivos trust.
3. Different Types of Trust Registration?
it is possible to create trust deed registration through the creation of a trust deed. At present, there are two types of trusts in India, namely public trusts and private trusts.
4. In India, How is a Trust Formed?
An under-aged person must seek the consent of a civil court of origin for the formation of trust on or on behalf of him or her. A trust can be formed by any person capable of forming contracts, including a person, HUF, AOP, establishment, etc.
5. Why is Trust Fundamentally Important?
The purpose of a trust is to provide the trustor with legal protection, to ensure that the assets of the trust are distributed lawfully to the designated beneficiaries, and to minimize inheritance or estate taxes.
6. How do I Register a Trust in India? What documents Do I need?
The following are common documents required to register a trust:
- Trusteeship Deed
- Passports, driver’s licenses, voter IDs, and Aadhaar cards are examples of identification proof.
- Photos of all parties involved in the event in passport size
- Each party of the Trust should have an Aadhaar card.
7. In India, can a trustee sell Trust Property?
A trustee is authorized to sell land via the public domain. Private contracts cannot be used to sell the land.
8. For income tax purposes, how do I register a trust?
To On the IT department portal, you can apply via form 10A for registration as a charitable or religious trust under section 12A.
9. Do you think trust or society is better?
An organization like a society excels in its democratic structure with membership and an elected body to oversee the organization’s affairs. The serving members of the Society can remain in control as long as they are elected to the managing committee. They also have the right to leave Society at any time. Trustees do not have such rights.
10. To whom does a trust belong?
A trust consists of four key parties: the settlor, the trustee, the appointer and the beneficiaries. A settlor appoints the trustee and transfers the property into the trust. This is called a settlement or a gift. The trustee is responsible for distributing and managing the trust’s assets as per the trust deed. An appointer is also responsible for appointing and removing trustees. As a final note, beneficiaries are the individuals who have an entitlement to the income of the trust.
- Is it possible to dissolve a trust?
Dissolving a trust comes with several options. For example, the trustee or settlor can revoke the trust. Or, they can distribute all the trust’s assets according to the trust deed. For example, there are certain situations where it may no longer be appropriate to maintain trust. There is also the option of dissolving the trust by agreement among the beneficiaries. Furthermore, the trust may be dissolved by a court order.