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IAI Actuarial Core Principles · Business Management · Trusts and agency

Mr Anil Bhatt, a Mumbai resident, wishes to create a trust over a plot of land in Nashik for his grandson. Under the Indian Trusts Act 1882, which of the following is required for the trust of this immovable property to be validly created?

The trust requires a signed written instrument, registered, unless it is created by will. Indian law does not allow a trust of immovable property to be created orally, and neither beneficiary acceptance nor stamp duty alone substitutes for a registered instrument.

  1. AA non-testamentary instrument in writing, signed by the author of the trust or the trustee and registeredCorrect
  2. BAn oral declaration made before two witnesses
  3. CA letter to the grandson's school confirming the plan
  4. DPayment of stamp duty alone, without any document
  5. A declaration by the grandson accepting the benefit

Explanation

For a trust of immovable property, the Act requires a written non-testamentary instrument signed by the author or trustee and registered, or else a will. An oral declaration, even with witnesses, is not enough. Acceptance by the beneficiary is not a condition for creation of the trust.

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