Trust means the responsibility which is placed on someone who has everyone’s confidence or authority. It is the confidence that is placed in an individual by providing him legal access to the property. He/ she has to hold this property in such a way that it is beneficial for others. Hence, the responsibility of the trustee consists of the following: the protection of the property of the trust, the trust property’s preservation and the utilisation of the income from trust as per the intentions of the creator of the trust. In this blog, we will discuss in detail the process to form a charitable trust in India.
Under The Indian Trusts Act, 1882, trust has been defined as a responsibility annexed to the property’s ownership. Trust arises from the confidence that is placed in someone and is accepted by the owner or has been accepted and declared by him either for others benefit or for his and others benefit.
1. Author of the Trust: The individual who declares or places his confidence.
2. Trustee: The individual who accepts the declared confidence.
3. Beneficiary: The individual for whose benefit the confidence was accepted.
4. Trust Property: The trust’s subject matter also known as trust money.
5. Trust Deed: If there are any instruments that are used for the declaration of trust; also known as an instrument of trust.
The various elements that are required in order to form a charitable trust are listed below:
According to Section 6 of the Indian Trusts Act, 1882, when the author of the trust has indicated the intention of forming a charitable trust either by acts or words, then a trust is created. The indications of the following are needed:
The main requirement for the creation of a private charitable trust is the intention of the author to create a trust which is reasonably certain either by words or acts. Therefore, it is possible to declare a trust either by words or acts. In the case of declaring a trust by words, the language should be clear enough to show the intention of creation of trust. The basic requirements for the formation of a charitable trust are listed below:
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