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

Asha, a Chennai businesswoman, wants to create a trust of ₹5 lakh in cash for her nephew's education. She does not execute any written deed. Under the Indian Trusts Act, 1882, when would this moveable property trust still be valid?

A trust of moveable property such as cash is valid without a registered deed if ownership of the property is transferred to the trustee. Merely announcing an intention, naming a beneficiary, or the trustee promising later does not create a valid trust.

  1. AIf she only tells friends about her intention
  2. BIf the ownership of the cash is transferred to the trusteeCorrect
  3. CIf she names a beneficiary but keeps the money herself, with no trustee
  4. DIf the trustee later promises to use it for education

Explanation

For moveable property, a trust is valid if declared by the written instrument as required for immoveable property, or if ownership of the property is transferred to the trustee. Telling friends or merely naming a beneficiary does not transfer ownership, so those options fail.

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