TRUST

Introduction

A trust is an agreement that allows a person trusted to give legal responsibility of their
estate to another person (truster) with obligation of benefit of third party (beneficiary).

Illustration: A transfer certain property to B for the education of C. Here B becomes the owner of
the property (legal responsibility) but to his ownership is attached the obligation of using the
property for C's education.

Parties to a trust

(i) Truster or Settlor - Whose Assets are being Handled

(ii) Trustee - is a individual or organisation that holds or control over the assets.
(iii) Beneficiary - individual that is set to eventually receive the assets benefiting from the
trust.

Definition

Professor keeton has defined trust as "A trust is the relationship which arises wherever
a person called the trustee is compelled in equity to hold property for the benefit of some
persons (of whom he may be one and who are termed cestui que trust) or for some object
permitted by law in such a way that the real benefit of the property accrues, not to the
trustee but to the beneficiaries or other object of trust."
The Definition of trust is given under Section 3 of Indian trust act 1882 • A trust is 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.

Kinds Of Trust

There are four classification of trust according to their Nature -

(i) Classification of trust according to the nature of the duties of the trustee.
(ii) Classification of trust according to their objects.
(iii) Classification of trust according to the mode of their creation.
(iv) Classification of Trust in reference to the consideration.
According to the nature of the duties of the trustee

Simple trust
A simple trust is a trust where in property is vested in one person upon trust for
another and the nature of trust not being prescribed by the settlor. in this case the
Cestui que trust has the trust right to be put into possession of the property and to
call upon the trustee to execute the conveyance of the legal estate as the
beneficiary directs.

Special trust
A special trust is a trust where the machinery of the trustee is introduced for the
execution of some purpose particularly pointed out by the settlor. ln such cases the
duties of the trustee are not left to be determined by the pleasure of the beneficiary
but are specifically laid down by the settlor. Illustration - a trust for B for life and
thereafter for the education of B's Children

According to their objects

Private trust
A private trust is a trust for the personal benefit of some specified and certain
individual or individuals or class of individuals.
Ex -a trust for the benefit of A or for the benefit of sons of A or descendants of A.

Public or Charitable trust

It is a trust for the benefit of public at large or trust for the benefit of the community
E.g - a trust for the advancement of education or a trust for the advancement of a
particular religion.

According to the mode of their creation

Express or declared trust

An express or a declared trust is one which is clearly and directly created express
words by the settlor. It may be created by deed or will or even by words of mouth.

Implied or presumed trust

An implied or presumed trust is one which is indirectly gathered from the
unexpressed but presumable intention of the settlor. It is not so clearly expressed
as an express trust but indirectly gathered from the settlor's presumable intention.
Illustration where A conveys to B two fields X and Y and declared as a trust respect
of X but it says nothing about Y. In the absence of anything to indie that A intended
to transfer the beneficial interest in Y to B, B would hold Y in trust for A.

Constructive trusts
This category of trusts is imposed by law, irrespective of the intention to create a
trust. In this situation, the court compels an individual to hold property for another
in order to prevent them from escaping with unconscionable conduct.

Secret trusts
Secret trusts are made when the settlor enters an arrangement with an individual,
that they will hold property in trust for some beneficiaries to be disclosed either
immediately or at a later time. These trusts are called secret because, where made
in a will, they don’t disclose the fact of the trust on the face of the will. Secret trusts
may be fully secret or half secret.

Resulting trust
A resulting trust is an equitable reversion that arises by operation of law whenever
a person has created an express intentional trust, but the express trust fails or
does not completely dispose of the trust property. When the trust fails or does not
completely dispose of the trust property, the undisposed property goes back to the
settlor in a resulting trust.

Precatory trust
A precatory trust is an express trust that is created with language that expresses
a future intent or a wish, but in which the court nevertheless finds legally
enforceable duties. Normally trust language must express a present intent to
create legally enforceable duties on the trustee in order to have trust intent. If there
is no trust intent, the trust fails. Sometimes the court will nonetheless find intent to
create legally enforceable duties in a trust that uses precatory language by looking
at fiduciary and familial relationships. If there is a familial or fiduciary relationship
between the parties, the court will often use that context to presume that intent to
create enforceable duties exists. Thus, the trust will not fail for lack of trust intent.