Definition of Trust
Creation of a trust, particularly relating to an immoveable property is also a specie of transfer of property. Trust is defined in section 3 of the Trust Act, 1882 as ” an obligation annexed to the ownership of property and arising out of a 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. In simple words it is a transfer of property by the owner to another for the benefit of a third person alongwith or without himself or a declaration by the owner, to hold the property not for himself and another.
Requirements of a Trust
A trust is not a contract of agency to hold the property, as in that case there would be no transfer of the property. In trust there is a transfer from the owner to the trustee subject to certain terms and conditions. Bailment is also a kind of trust, but in bailment also there is no transfer of any interest in the property, but only a transfer of possession without ownership. Thereof, a trust is essentially a transfer of property by one to the other to be held by the other for the benefit of some person or for carrying out some object. It is no also a sale because a sale cannot be conditional and in sale there is consideration which is absent in a trust. The purpose of a trust must be lawful, that is,
|1.||It should not be forbidden by law.|
|2.||It should not be of such nature that, if permitted it could defeat the provisions of any law.|
|3.||It should not be fraudulent.|
|4.||It should not involve or imply injury to the person or property of another or|
|5.||It should not be such as would be regarded by a court as immoral or opposed to the public policy.|
Where a trust is created for two purposes one of which is lawful and the other is not and the two purposes cannot be separated, the whole trust is void.
Contact Us : +91-7352679239