Question 1

What is a Trust?

Accepted Answer

A trust is a legal arrangement where a person (called the settlor) transfers assets to
another person or group (called trustees) to manage them for the benefit of chosen
beneficiaries. Trusts in India are governed by the Indian Trusts Act, 1882.

Question 2

What are the types of Trusts?

Accepted Answer

● Private Trust: Created for specific individuals or family members.
● Public / Charitable Trust: Created for the benefit of the public or a charitable
cause.
● Revocable Trust: Can be changed or cancelled by the settlor during their lifetime.
● Irrevocable Trust: Cannot be changed once created, except in special legal
situations.

Question 3

Who can create a Trust?

Accepted Answer

Any competent adult settlor of sound mind can create a trust for lawful purposes,
appointing trustees who are not minors or insolvent.​

Question 4

Is Trust registration mandatory?

Accepted Answer

Yes, trust registration is mandatory in India for Public charitable trusts to claim tax
benefits (like Sections 12A/12AB & 80G) and for any trust involving immovable propertyto be legally valid against third parties. However, Private trusts without immovable assets can function without registration but lack enforceability and benefits, making registration highly advisable for all types.

Question 5

How to register a Trust?

Accepted Answer

Draft a trust deed, execute on stamp paper, present to Sub-Registrar with ID proofs of
trustees, pay fees, and obtain certificate within 15-30 days.

Question 6

Who is a Trustee?

Accepted Answer

Trustees hold and manage assets fiduciary-style, investing prudently, filing taxes, and
distributing as per deed terms.​

Question 7

Who can be a Beneficiary?

Accepted Answer

Specific individuals/families for private trusts or public at large for charitable ones. Even
minors can be beneficiaries under a trust.

Question 8

Can Trustees be changed?

Accepted Answer

Yes, via deed provisions for appointment/removal, requiring meetings and
documentation for smooth transitions.​

Question 9

Can a Trust be revoked?

Accepted Answer

Revocable trusts can be revoked by settlor anytime. However, irrevocable trusts can
only be revoked by Court if terms allow or circumstances change.​

Question 10

What happens if Trust rules are not followed?

Accepted Answer

If trustees do not follow the trust rules, trustees can be removed as by the trust deed or
beneficiaries can approach the court. Trustees may be removed or held legally
responsible for misuse or mismanagement of trust assets.

Question 11

What is the difference between a Trust and a Will?

Accepted Answer

A will comes into effect only after a person’s death, while a trust can be used during the
person’s lifetime and after. A trust helps in managing assets smoothly and avoids
delays or disputes during distribution.

Question 12

How long does a Trust remain valid?

Accepted Answer

A trust remains valid for the period mentioned in the trust deed or until its purpose is
fulfilled, subject to applicable laws.

Question 13

Do beneficiaries have control over Trust assets?

Accepted Answer

No, beneficiaries receive benefits as per the trust deed but do not directly control the
trust assets. Asset management is the responsibility of the trustees.

Question 14

Is income earned by a Trust taxable?

Accepted Answer

Yes, trust income may be taxable depending on the type of trust and how the income is
distributed. Proper tax planning and compliance are important.

Question 15

Is a Trust useful for minor children?

Accepted Answer

Yes, a trust is ideal for minors, as trustees can manage and distribute funds for the
child’s education, healthcare, and other needs until they reach a specified age.

Frequently Asked Questions