TRUST – MEANING
A trust is a legal entity created under Indian law to hold and manage property for the benefit of one or more individuals. The trust can be formed for any purpose, including financial security for the beneficiaries. Under Indian law, a trust is a separate legal entity from its trustees. The trustees are responsible for administering the trust property and carrying out the settler’s wishes. They must also account for the trust property to the beneficiaries at regular intervals. In addition, trusts can create legal contracts between individuals and the trust.
Step 1 – Decide Trust Details
In the First step following details are required for Trust:
- Name of the Trust
- Address of the Trust
- Objects of the Trust (charitable or Religious Trust)
- One Settler of the Trust
- One Trustee of the Trust
- Trust property movable or immovable property (To save on stamp duty, a small amount of cash is usually given to be the initial property of the trust).
- Two Witnesses
Step 2 – Prepare Trust Deed
Prepare a Trust Deed on stamp paper of expected value (3% of the value of the trust’s property in Delhi, rate varies from state to state)
Requirements of the Trust Deed under the Indian Trust Act, 1882
The Trust Deed shall comply with the following:
- Trust deed shall be on stamp paper of required value.
- A passport size photograph and a self-attested copy of the settler’s KYC shall be attached.
- One passport size photograph and a self-attested copy of KYC of each of the trustee shall be attached.
- Execution of Trust Deed shall be witness by two persons.
- Self-attested copy of the proof of identity of each of the two witnesses shall be attached.
- Settler shall sign on all pages of a Trust Deed.
- Proof of the registered office address of the Trust (electricity/water bill not older than 2 months).
- No objection letter signed by the landowner.
Step 3 – Certified Copy of Trust Deed
After preparation of Trust Deed, submit it to the sub-registrar, sub registrar will check IDs of these persons, after this the deed will go to the counter where data entry takes place, in the end settler and two witnesses will be photographed. Fee of Rs. 1,100 shall be paid out of which Rs. 100 is the registration fee and Rs. 1,000 is the charges of keeping a copy of the Trust Deed with a sub–registrar. (Law regarding physical presence of Trustees is different in different states.)
Once documents are submitted, collect a certified copy of the Trust Deed within one week (approx.) from the registrar’s office.
Step 4 – Register Trust Deed with Registrar
After receiving a certified copy of the Trust Deed, submit the same along with properly attested photocopies with the local registrar.
At the time of registration, the Settler and two witnesses must be present in person along with their identity proof in the original.
The registrar retains the photocopy and returns the original registered copy of the trust deed.
Step 5 – Obtain Registration Certificate
After submitting the Trust Deed with the registrar, the registrar retains the photocopy and returns the original registered copy of the Trust Deed.
Then, after completion of all the formalities registration certificate is issued within a approx. seven working days.
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i need a 2 year old cheritable trust