A trust is a form of accountability or responsibility placed on someone with whom the authority is placed, who holds a legal property made entitled to him to serve the benefit and faith of others. The trustees responsibility is to preserve the particular property as per the intentions of the creator of the trust. It is the trustees responsibility to protect the rightful ownership of the property.
As per Section 3 of the Trust Act, 1882, a trust is an obligation annexed to the ownership of property, and arising out of 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. The five essential elements of a trust formation are: The creator of the trust or declarer of confidence also known as the author, the trustee in whom the confidence has been entrusted, the beneficiary who obtains the benefit of such creation, the property itself, and the intention of the author who has created the trust for instance, when a trust is created to preserve holy pilgrimage sites.
The creation of trust deed is the primary document necessary for the formation and entitlement of trust property to the trustee. The deed in terms of public trust is governed by the General Law; whereas the private trusts are governed by the Indian Trust Act, 1882. A trust or a society is however legally two different entities. The trusts are usually irrevocable unless mentioned in the trust deeds. Hence, they cannot be wound up.
Giving a unique name to the trust: The Emblems and names Act, 1950 governs this procedure. It shall be ensured that the name selected does not portray any patronage from any government and shall be registered with the registrar.
Determining the Author/settler: It is important that such determination is made as per the deed and ensured that a minimum of two trustees are a part of the deed. The settler himself cannot be the trustee and the registrar or sub-registrar has discretion on this matter.
Prepare the Trust Deed: The trust deed consists of the Memorandum of Association (MOA) and other rules and regulation consisting of clauses that give basic most material information about the trust such as the name clause, object clause, settler and trustee clause etc. It also consists of bylaws of the trust to be abided by, by each signatory to the trust deed.
Submission of trust deed with attested copies of relevant proofs, certificates and documents to the local registrar.
Our team at WCL assists our clients in formation and establishment of such public and private trusts ensuring efficient use of their time and other resources.