Trust Definition | Trust Application | Types of Trust | What is a Trust

trust definition

Trust Application, Trust Definition, Types of Trust

Trust Definition – In Law, a Trust is any relationship in which property, whether real, personal, any tangible, or intangible is held by 1 party for the benefit of another.

A trust conventionally arises when the property is transferred to 1 party which is to be hold by another party for the benefit of a 3rd party. The settlor is also known as the trustor, donor, creator, grantor, or founder. The settlor may himself be a beneficiary.


It extends to our whole India except the State of Jammu and Kashmir and the Andaman and Nicobar Islands. Still, the Central Government by notification in the official gazette, may extend it to Andaman and Nicobar Islands or any other part from time to time.

It does not apply to public religious endowments or Trust. It shall not affect the Rule of Mohammedan law as to Waqf or the mutual relations of the members of an undivided family of customary or personal laws or public or private religious or charitable endowments or to trusts to distribute prize taken in war among the captors.


  1. Section 3 of the Indian Trusts Act provides for “Trust” – ” A “Trust” is an obligation attached to the ownership of any property which arises out of confidence and accepted by the owner, or any declaration which is accepted by him, for the benefit of another, or of another and the owner.”
  2. Maitland – It is referred to a person’s rights which he has to abide with on behalf of another or complete the same for the specific purpose.
  3. Halsbury – ” A trust in the modern and confined sense of the word is a confidence reposed in a person concerning the property. Trust Definition

Cestui Que Trust – A cestui que trust and the beneficiary are synonymous terms. A cestui que trust is a person for whose benefits the trustee holds the property in the faith. He is to perform for whose benefit the trustee accepts the confidence.

Kinds of Trusts

Based upon the nature of the duty imposed on the trustees, they are classified as follows –

  1. Simple Trust

A simple Trust is one where the trustee is a mere depository of the trust property with no active duties to perform. Example – A holds simply in Trust for B; here A is simply the servant of B and it is his duty to carry out B’s orders concerning the trust property, unless B is a lunatic or infant.

  1. Special Trust

A special trust is one where the trustee must exercise his discretion in carrying out the Trust. In this case, the machinery of a trustee is introduced for the execution of some purposes, particularly pointed out. The trustee is not, as before, a mere passive depository of the estate, but is called upon to exert himself actively in the execution of the settlor’s intention; as where a conveyance is executed in favor of trustees upon Trust to sell for payment of debts. Trust Definition

Based on the point of view of the number and class of beneficiaries and their interest in the trust property.

  1. Public Trust

A public or charitable trust has for its object the carrying out of a purpose which will benefit society at large, or the members of an uncertain and fluctuating body. Example – a trust for the advancement of education irrespective of caste or creed.

  1. Private Trust

It is a Trust which is created through settlor when he expresses his intention (orally or in writing) to establish such Trust and do the required formalities.

It consists of four distinct elements –

  1. a) An intention to create the Trust

It is must for the settlor to have intention to impose enforceable duties on a trustee in order to deal with the property for the benefits of others. The intension can be verbally or in writing.

  1. b) A subject matter

The property must exist and can be definite or indefinitely ascertainable at the time the Trust is created and throughout its existence. If the subject matter of the Trust is destroyed, the Trust ends.

  1. c) A Trustee

A Person who have a legal capacity to take, hold and administer property for her own use can take, hold, and administer the estate in Trust. Non-residents of the state in which the Trust is to be administered can be trustees. A corporation can be trusted. An unincorporated association, such as a Labour Union or social club, usually cannot serve as a trustee. Trust Definition

  1. d) A Beneficiary

It is referred to the person who becomes a beneficiary or designated beneficiary in the Trust which has been created by a person.

Based on the Mode of creation

  1. Express or declared Trust

It is a trust created by the settlor through words or deed or will. Example – A conveys property to B with the direction to hold it for the benefit of C for life and after that for C’s children.

It may be further divided into following parts –

  1. a) Executed Trust

It is executed when no further instrument is necessary, and the Trust is finally declared in the first instance.

  1. b) Executory Trust

Here a further instrument or document is required to carry out in order to give effect to the first document.

  1. Implied Trust

It is presumed or presumptive Trust arising from the presumed intention of the parties. There is no expression of the wish to create a trust, but the circumstances are such that the court presumes that the settlor intended to create a trust.

  1. Constructive Trust

It is a trust arising by the construction of equity, by the owner of any property. when it would be considered to be an abuse of confidence to hold such property.

  1. Resulting Trust

It is a trust which is implied in favor of the person creating it or his legal representative. They all are implied Trust, but all implied Trust are not necessarily resulting in Trust.

  1. Precatory Trust

It arises when words of wish, hope, desire, or entreaty accompany a gift to the effect that the done may dispose of the property in some way, which shows that a trust was intended.

The Indian Trusts Act does not require any form of expression for the creation of a trust, if overall the general intention to create a trust can be gathered.

  1. Secret Trust

A secret Trust is a trust created by the testator suppressed on the face of a Will. The testator makes a gift of property to A without stating in the will that he is to hold it on Trust, but tells A directly or indirectly, that he wishes him to keep the property on Trust for B, A will be compelled to carry out the Trust. In this way a secret trust has been created. Trust Definition

Based on the Consideration

  1. Trust of Value

It is created when the consideration moves from the beneficiary. Example – A trust created in favor of X if he marries Y.

  1. Voluntary Trust

It is created when no consideration proceeds from the beneficiary.

Trust not covered under the above four heads

  1. Illusory Trust

This is not a real trust in as much as the form of the instrument only shows that some persons are apparently beneficiaries, but the object of the settlor as gathered on the document as a whole, does not reveal that the settlor intended to create a trust for their benefit.

  1. Discretionary Trusts

It is a trust which does not afford to a beneficiary a right to any part of the income of the trust property but gives the trustee a discretionary power to pay him such a part of the income as they think fit.


A trustee or trustees are generally appointed by the author of the Trust in the trust deed. The trust deed lays typically down an elaborate provision for the appointment as also the discharge of trustees.

Who may be a Trustee?

A person who may be a trustee must be capable of taking or holding the property of which the Trust is declared. The trustee must be competent to deal with the estate as required by Trust, or as directed by the beneficiaries. In contrast, certain classes are, by nature or by rules of Law, under disability. Trust Definition

Section 74 of the Indian Trusts Act provides for the appointment of a new trustee by the court.

Creation of a Trust

It may be considered under two heads –

  1. Express Trusts – No form of expression is necessary for the creation of a trust if the general intention to create a trust can be gathered. Chapter II of the Indian Trusts Act, II of 1882, (Sections 4-10) deals with the Creation of Trusts.

Essentials of a Valid Trust

  1. An intention to create a Trust.
  2. Purposes of the Trust.
  3. Beneficiary
  4. Trust property
  5. Trusts arising by operation of Law

Trusts which arise by operation of Law may be grouped under

  1. a) Implied Trust
  2. b) Resulting Trust
  3. c) Constructive Trust

Duties and Liabilities

Section 11 to 22 of Chapter III of the Indian Trusts Act deals with duties and liabilities.

  1. To execute the Trust
  2. To inform about state of Trust property
  3. To protect title to trust property
  4. To invest trust funds
  5. To exercise reasonable care
  6. To convert the perishable property
  7. To be impartial
  8. To prevent waste
  9. To keep accurate accounts


  1. Liability for breach of Trust
  2. No set-off allowed to the trustee
  3. Liabilities for wrongful acts
  4. Several liabilities of co-trustees
  5. Liability of trustee where beneficiary’s interest
  6. Liability for breach of duty

Click here for- Probate In India


Trust is a concept that revolves around three parties, that is, the author, the trustee and the beneficiary or the beneficiaries having respective rights and legal obligations assigned to them by trust deed in relation to trust property. Therefore, if all the requisite procedures are followed and adopted, a trust is formed.


There are no comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Start typing and press Enter to search

Shopping Cart

No products in the cart.

Translate »

Thanks for contacting us