Setting Up of Business, Industrial and Labour Laws · Non-Corporate Entities

Rights and Liabilities of Beneficiary, Vacating Trusteeship and Extinction of Trust

Updated 11 October 2026 · Fact-checked

A beneficiary has the right to the benefit of the trust, to information about the trust property, and to enforce the trust against the trustee. Under Section 77 a trust is extinguished when its purpose is fulfilled, becomes unlawful or impossible, or a revocable trust is expressly revoked. A trustee's office is vacated by death or discharge (Section 70).

Understand Rights and Liabilities of Beneficiary; Vacating Trusteeship and Extinction

A trust is an obligation: the trustee holds property for the benefit of another person, the beneficiary. The beneficiary does not manage the property. But the law gives the beneficiary tools to make sure the trustee does the job properly.

Think of the beneficiary's rights in three groups. First, the right to the benefit: to receive the income or the property as the trust instrument directs. Second, the right to information: to know the state of the trust property and to see that accounts are kept. Third, the right to enforce: to go to a court if the trustee fails in the duties. Frame your answer around these three groups. Where you cite a section number for these rights, be sure of it; if you are unsure, state the rule in plain words.

A beneficiary can also transfer his interest. Section 69 says the person who receives it gets the beneficiary's rights and is subject to his liabilities in respect of that interest, as they stood at the date of the transfer. The transferee steps into the beneficiary's shoes, no better and no worse.

A trustee's office can end in more than one way. Section 70 says the office is vacated by the trustee's death or by his discharge from office. Discharge can come through the methods the Act provides, such as retirement, removal or a court order. Do not confuse the office of trustee ending with the trust ending. The trust usually carries on with a new trustee.

A trust itself ends only in the cases listed in Section 77. It is extinguished (a) when its purpose is completely fulfilled, (b) when its purpose becomes unlawful, (c) when fulfilment of its purpose becomes impossible by destruction of the trust property or otherwise, or (d) when the trust, being revocable, is expressly revoked. Remember that Section 1 also keeps some things outside the Act, such as waqf under Muhammadan law and public or private religious or charitable endowments. So the Act is mainly about private trusts, not public religious or charitable ones.

Key rules to remember

Rights of beneficiary (three groups): Benefit + Information + Enforcement; Use this as a framework to organise the answer. Cite a section number only if you are certain of it.
Beneficiary's transferee (Section 69): Transferee gets the rights and bears the liabilities of the beneficiary in respect of that interest at the date of transfer; The transferee takes the position as it stood at the transfer date.
Vacating of trustee's office (Section 70): Office vacated by: death OR discharge from office; Vacating the office does not by itself end the trust.
Extinction of trust (Section 77): (a) purpose fulfilled; (b) purpose unlawful; (c) purpose impossible by destruction of trust property or otherwise; (d) revocable trust expressly revoked; Only these four grounds. Revocation counts only if the trust is revocable and the revocation is express.
Power of sale (Section 37): Trustee empowered to sell may sell subject to prior charges or not, together or in lots, by public auction or private contract, at one time or several times, unless the instrument directs otherwise; The trust instrument can override this default.
Savings (Section 1): Act does not affect waqf under Muhammadan law, undivided family relations under customary or personal law, or apply to public or private religious or charitable endowments; Explains why the Act is about private trusts.

How to solve Rights and Liabilities of Beneficiary; Vacating Trusteeship and Extinction questions

Use this method for any question on beneficiary rights, trusteeship ending or extinction.

1Identify what is asked: a beneficiary's right, the end of a trustee's office, or the end of the trust itself.
2Check whether the Act applies at all. Religious or charitable endowments and waqf are outside it under Section 1.
3State the rule in plain words and cite the section only when sure: Section 69 for transferees, Section 70 for vacating office, Section 77 for extinction.
4Apply the rule to the facts. For extinction, match the facts to one of the four grounds in Section 77.
5Separate the trustee's office from the trust. Ask whether the trust continues with a new trustee.
6Write a clear conclusion in one line: the trust is or is not extinguished, or the office is or is not vacated.

Quickest way: Four-ground check for extinction

When to use it: Use when a problem asks whether a trust has come to an end.

Ask: is the purpose fully done? If yes, Section 77(a).
Ask: has the purpose become illegal? If yes, Section 77(b).
Ask: is the purpose impossible, for example the property destroyed? If yes, Section 77(c).
Ask: is the trust revocable and has it been expressly revoked? If yes, Section 77(d).
If none fits, the trust continues. A trustee's death or discharge alone does not end it.

Common mistakes in Rights and Liabilities of Beneficiary; Vacating Trusteeship and Extinction

Saying the trust ends when the trustee dies.
Students mix up the office of trustee with the trust.
Fix: Section 70 only says the office is vacated by death or discharge. The trust continues and a new trustee is appointed.
Saying any trust can be revoked by the settlor.
Students read Section 77(d) loosely.
Fix: Section 77(d) applies only when the trust is revocable and is expressly revoked. Write both conditions.
Adding extra grounds of extinction, such as the beneficiary's death or a trustee's resignation.
Students rely on common sense instead of the list.
Fix: Stick to the four grounds in Section 77. Other events do not by themselves extinguish the trust.
Applying the Act to a public religious or charitable trust.
Students ignore the savings clause in Section 1.
Fix: Mention that Section 1 keeps waqf and religious or charitable endowments outside the Act, so the question may be governed by other law.
Saying the transferee of a beneficiary's interest gets only rights.
Students remember the benefit and forget the burden.
Fix: Section 69 gives the transferee the rights and also the liabilities of the beneficiary in respect of that interest at the date of transfer.

Worked examples

Example 1

A trust was created to hold a godown in Surat so that its rent would pay for the education of Meera until she completes her degree. Meera has completed her degree. Is the trust extinguished?

Show the solution

Provision: Section 77(a) says a trust is extinguished when its purpose is completely fulfilled.
Facts: the only purpose was to fund Meera's education until she completes her degree. She has now completed it.
Analysis: nothing in the facts shows any further purpose, so the purpose is completely fulfilled.
Conclusion: the trust is extinguished under Section 77(a).

Answer: Yes. The purpose is completely fulfilled, so the trust is extinguished under Section 77(a).

Example 2

Ramesh is a beneficiary of a private trust. He transfers his interest to Suresh. Trustee Anil dies the next month. State the position of Suresh, and whether the trust ends on Anil's death.

Show the solution

Provision on transfer: Section 69 says a person to whom a beneficiary transfers his interest has the rights and is subject to the liabilities of the beneficiary in respect of that interest at the date of transfer.
Application: Suresh gets Ramesh's rights and bears his liabilities for that interest, as they stood on the date of transfer.
Provision on office: Section 70 says the office of a trustee is vacated by his death or discharge.
Application: Anil's death vacates his office only. Death of a trustee is not one of the four grounds in Section 77.
Conclusion: the trust continues and a new trustee is appointed.

Answer: Suresh steps into Ramesh's position under Section 69. Anil's death vacates his office under Section 70, but the trust is not extinguished because none of the grounds in Section 77 applies.

Exam tips

Learn Section 77 as a four-point list. Examiners often ask you to list the modes of extinction and apply them to a short fact pattern.
Always separate vacating of office (Section 70) from extinction of the trust (Section 77).
Use the benefit, information and enforcement frame for beneficiary rights, and add Section 69 for transferees.
Mention the Section 1 savings when a question involves a waqf or a religious or charitable endowment.
Write in ICSI style: provision, facts, conclusion. Cite a section only when you are sure of it.

Practice questions from Non-Corporate Entities

Rights and Liabilities of Beneficiary; Vacating Trusteeship and Extinction in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Rights and Liabilities of Beneficiary; Vacating Trusteeship and Extinction: frequently asked questions

In how many ways can a trust be extinguished?

Section 77 lists four: purpose completely fulfilled, purpose becomes unlawful, purpose becomes impossible by destruction of trust property or otherwise, and express revocation of a revocable trust. Write all four with a short note on each.

Does a trust end when the trustee dies?

No. Under Section 70 the trustee's office is vacated by death or discharge. The trust continues, and a new trustee is appointed to carry out its purpose.

What happens when a beneficiary transfers his interest?

Under Section 69, the transferee has the rights and is subject to the liabilities of the beneficiary in respect of that interest at the date of transfer. He takes the interest as it then stood.

What is the difference between a public trust and a private trust?

A private trust is for specified beneficiaries, such as family members. A public trust is for the public or a section of it, usually for religious or charitable purposes. Section 1 says the Indian Trusts Act does not apply to public or private religious or charitable endowments.