CSR and Social Governance · Societies and Trusts

Creation of Trusts and Who May Create Them

Updated 11 October 2026 · Fact-checked

A trust is created when the author shows, with reasonable certainty, an intention to create a trust, its purpose, the beneficiary and the trust-property, and transfers the property to the trustee (Section 6). Under Section 7, any person competent to contract may create it; a minor needs court permission. The purpose must be lawful (Section 4).

Understand Creation of Trusts and Who May Create

A trust starts with one person, the author of the trust, who wants property held and managed for someone else's benefit. The Indian Trusts Act, 1882 sets out when that wish becomes a legally valid trust.

Three questions decide most exam problems. Who can create a trust (Section 7)? What can be put into a trust (Section 8)? What is the trust for (Section 4)? Then you check whether the trust was properly created (Section 6).

Section 7 says a trust may be created by every person competent to contract. Competence is judged under Section 11 of the Indian Contract Act, 1872, as the Act's footnote points out. A minor cannot create a trust alone. A trust may be created by or on behalf of a minor only with the permission of a principal Civil Court of original jurisdiction. In each case this is subject to the law on how far the author may dispose of the trust-property.

Section 8 says the subject-matter must be property that is transferable to the beneficiary. It must not be a merely beneficial interest under a subsisting trust. Section 4 says a trust may be created for any lawful purpose. A trust with an unlawful purpose is void.

The Act also has limits. Section 1 says it does not affect Muhammadan law of waqf, and does not apply to public or private religious or charitable endowments. Keep this in mind when a question involves a charitable trust.

Key rules to remember

Who may create a trust (Section 7): Author = (a) every person competent to contract, or (b) by or on behalf of a minor with permission of a principal Civil Court of original jurisdiction; Subject in each case to the law on how far the author may dispose of the trust-property.
Essentials of creation (Section 6): Intention + Purpose + Beneficiary + Trust-property, each indicated with reasonable certainty, + transfer of property to the trustee; Transfer is not needed if the trust is declared by will or the author is himself the trustee. Section 6 is subject to Section 5.
Subject-matter (Section 8): Property transferable to the beneficiary; not a merely beneficial interest under a subsisting trust; A bare expectation or a mere beneficial interest cannot itself be the trust-property.
Lawful purpose (Section 4): Unlawful if: forbidden by law; defeats a law; fraudulent; injures person or property of another; immoral or opposed to public policy (as the Court regards it); An unlawful trust is void. If two purposes, one lawful and one unlawful, cannot be separated, the whole trust is void.
Extinction (Section 77): Purpose fulfilled; purpose becomes unlawful; fulfilment impossible; revocable trust expressly revoked; Link this to the creation question when the facts show the trust ending.

How to solve Creation of Trusts and Who May Create questions

Use this order for any case-based question on creating a trust. Write the provision, apply it to the facts, then conclude.

1Identify the author and test competence under Section 7. Is the person competent to contract? If a minor, was court permission obtained?
2Check the Act applies. Section 1 excludes waqf, religious or charitable endowments and certain other cases.
3Test each Section 6 essential in turn: intention, purpose, beneficiary, trust-property. Ask whether each is indicated with reasonable certainty.
4Check the subject-matter under Section 8: is it transferable property, and not merely a beneficial interest under a subsisting trust?
5Check the purpose under Section 4. If it is unlawful, say the trust is void; if two purposes cannot be separated, the whole trust is void.
6Check the transfer to the trustee. It is needed unless the trust is declared by will or the author is himself the trustee.
7State the conclusion: valid, void, or not a trust (only a wish or a condition). Give the reason in one line.
8 Mention drafting or compliance points if asked, such as a clear trust deed naming purpose, beneficiary and property.

Quickest way: Four-gate check

When to use it: Use when you have 8 to 10 minutes and a short fact pattern about whether a trust exists or is valid.

Gate 1, Person: competent to contract, or minor with court permission?
Gate 2, Certainty: intention, purpose, beneficiary, property all clear?
Gate 3, Property and purpose: transferable property (Section 8) and lawful purpose (Section 4)?
Gate 4, Transfer: property passed to trustee, or will or self-declaration?
If any gate fails, the trust fails or was never created. Name the gate and the section.

Common mistakes in Creation of Trusts and Who May Create

Saying a minor can never create a trust.
Students remember that minors cannot contract and stop there.
Fix: Section 7(b) allows a trust by or on behalf of a minor with permission of a principal Civil Court of original jurisdiction.
Treating a hope or request as a trust.
The words 'in trust' or 'benefit' look enough.
Fix: Apply Section 6 illustrations: 'hoping he will continue it in the family' fails for want of a certain beneficiary. Certainty is required for each essential.
Always requiring transfer of property to the trustee.
Students memorise the transfer as a fixed step.
Fix: Section 6 excuses transfer when the trust is declared by will or the author is himself the trustee.
Declaring the whole trust void for any unlawful purpose.
Students skip the separability rule.
Fix: Section 4 voids the whole trust only where the lawful and unlawful purposes cannot be separated. The section does not expressly say what follows when they can be separated, so do not state a rule beyond the text.
Applying the Act to every charitable or religious trust.
The title says 'Trusts' so students assume it covers all.
Fix: Section 1 says the Act does not apply to public or private religious or charitable endowments. Mention this savings clause when the facts involve them.
Treating a condition as a trust.
A gift with an obligation to pay debts looks like a trust for creditors.
Fix: Per the Section 6 illustration, a bequest on condition of paying debts and a legacy is a condition, not a trust for those persons.

Worked examples

Example 1

Ravi, aged 16, wants to settle his shop premises in Pune on a trust for his sister's education. He signs a deed himself. Is a valid trust created? Would your answer differ if his guardian applies to court?

Show the solution

Provision: Section 7 allows a trust by every person competent to contract, and by or on behalf of a minor with permission of a principal Civil Court of original jurisdiction.
Analysis: Ravi is 16, so he is a minor and not competent to contract under Section 11 of the Indian Contract Act, 1872. He signed on his own, without any court permission.
So Ravi is not competent under Section 7(a). A trust by or on behalf of a minor can be created only under Section 7(b), which needs the permission of the principal Civil Court of original jurisdiction. Without that permission, the trust is not validly created under Section 7.
If his guardian applies and the court grants permission, a trust by or on behalf of Ravi may be created under Section 7(b), subject to the law on how far the author may dispose of the trust-property.
Practical point: the deed should name the purpose (education), beneficiary (his sister), property (the shop) and trustee, and the property must be transferred to the trustee.

Answer: On these facts no valid trust is created under Section 7: Ravi is not competent under Section 7(a) and has no court permission under Section 7(b). If the principal Civil Court of original jurisdiction grants permission, a trust by or on behalf of him can be created under Section 7(b).

Example 2

Meena, an adult, writes that she gives ₹10,00,000 to Kiran, 'hoping he will help my relatives as he thinks fit'. Kiran receives the money. Is there a trust? Also, would a trust to use the money partly for a smuggling business and partly to support her children be valid?

Show the solution

Provision: Section 6 requires reasonable certainty of intention, purpose, beneficiary and trust-property, plus transfer to the trustee.
Analysis of the first part: Meena is competent, and the money is transferable property. But 'my relatives' as Kiran thinks fit does not identify the beneficiary with reasonable certainty, and 'hoping' does not show a clear intention. This is like the Section 6 illustrations on hope and on distributing among such members as the person thinks deserving.
So no trust is created.
Second part: Section 4 makes a trust void if its purpose is forbidden by law. A smuggling business is unlawful.
Where a trust has two purposes, one lawful and one unlawful, Section 4 makes the whole trust void if the two cannot be separated. Section 4 illustration (b) treats a trust to carry on a smuggling business, with the profits supporting A's children, as void.
Conclusion for the second part: the trust is void under Section 4 if the lawful and unlawful purposes cannot be separated, as illustration (b) shows for this kind of arrangement.

Answer: The first arrangement is not a trust, since the beneficiary and intention are not certain. The second trust is void under Section 4 if the lawful and unlawful purposes cannot be separated; illustration (b) treats a trust to carry on smuggling with profits supporting A's children as void.

Exam tips

Quote the section number first, then apply it. Examiners reward provision, analysis, conclusion in that order.
Learn the Section 6 illustrations. They give ready examples of 'not a trust' for uncertain beneficiary, property or intention.
In minor questions, name the court exactly: principal Civil Court of original jurisdiction.
Always say whether Section 1 excludes the case, especially for religious or charitable endowments and waqf.
Link creation to extinction (Section 77) in longer questions, for example a trust whose purpose becomes unlawful.

Practice questions from Societies and Trusts

Creation of Trusts and Who May Create in other exams

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

CS ExecutiveNature and Creation of a Trust

Creation of Trusts and Who May Create: frequently asked questions

Who may create a trust under Section 7 of the Indian Trusts Act, 1882?

Every person competent to contract may create a trust. A trust may also be created by or on behalf of a minor with the permission of a principal Civil Court of original jurisdiction. This is subject to the law on how far the author may dispose of the trust-property.

What are the essentials of creating a trust under Section 6?

The author must indicate with reasonable certainty his intention to create a trust, its purpose, the beneficiary and the trust-property. He must also transfer the property to the trustee, unless the trust is declared by will or he is himself the trustee.

When is a trust void for unlawful purpose?

Under Section 4, a trust is void if its purpose is forbidden by law, defeats a law, is fraudulent, involves injury to another's person or property, or is regarded by the Court as immoral or opposed to public policy. If a lawful and an unlawful purpose cannot be separated, the whole trust is void.

Can a beneficial interest under an existing trust be the subject of a new trust?

Section 8 says the subject-matter must be property transferable to the beneficiary and must not be a merely beneficial interest under a subsisting trust. So a bare beneficial interest alone cannot be the trust-property.