Trust, Parties & Creation — KSLU Property Law Notes

Trust, Parties & Creation

A trust (s.3, Indian Trusts Act 1882) is an obligation annexed to the ownership of property, arising out of a confidence reposed in and accepted by the owner for the benefit of another (the beneficiary). The trustee holds the legal title, while the beneficiary takes the beneficial enjoyment — the hallmark of a trust is this split between legal title and beneficial interest.

Party	Role
Author / Settlor	The person who reposes the confidence and creates the trust
Trustee	The person who accepts the confidence and holds the legal title
*Beneficiary (cestui que trust)*	The person for whose benefit the trust is accepted
Trust property	The subject-matter held under the trust

flowchart TD
    A["Valid TRUST requires…"]:::root
    A --> B["Certainty of INTENTION"]:::leaf
    A --> C["Certainty of OBJECT (beneficiary)"]:::leaf
    A --> D["Certainty of SUBJECT-MATTER"]:::leaf
    A --> E["Lawful purpose + capable parties +<br/>transfer to trustee (s.6)"]:::leaf
    A --> F["Immovables: registered writing<br/>or will (s.5)"]:::leaf

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    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
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A valid trust needs the three certainties — of intention, of object and of subject-matter — together with a lawful purpose, capable parties, and transfer of the property to the trustee (s.6); for immovable property the declaration must be by a registered, signed writing or by will (s.5). Kinds of trusts include private vs public, express vs implied, simple vs special, and constructive/resulting trusts arising by operation of law.