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Assignment Trust Law Junayed Bin Sagir 19-39800-1

This document discusses various aspects of trust law in three paragraphs: 1) It defines the key parties in a trust - the settlor, trustee, and beneficiary. It explains their roles and provides an example to illustrate. 2) It outlines several rights and powers of trustees under trust law, including the right to title of trust property, indemnity for breach of trust, settlement of accounts, and various powers to deal with and convey trust property. 3) It discusses the liability of trustees for breach of trust, noting trustees are liable to compensate losses unless induced by fraud, and outlines some exceptions like where a breach brings interest or profit to the trust.

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199 views

Assignment Trust Law Junayed Bin Sagir 19-39800-1

This document discusses various aspects of trust law in three paragraphs: 1) It defines the key parties in a trust - the settlor, trustee, and beneficiary. It explains their roles and provides an example to illustrate. 2) It outlines several rights and powers of trustees under trust law, including the right to title of trust property, indemnity for breach of trust, settlement of accounts, and various powers to deal with and convey trust property. 3) It discusses the liability of trustees for breach of trust, noting trustees are liable to compensate losses unless induced by fraud, and outlines some exceptions like where a breach brings interest or profit to the trust.

Uploaded by

gurujee
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment

TRUST LAW

Junayed Bin Sagir

19-39800-1
Introduction

Trust: A relationship created at the direction of an individual, in which one or more


persons hold the individual's property subject to certain duties to use and protect it for the
benefit of others is called trust. The act or the legal things that is protect this trust and
directed to work properly is called trust law.
There must be needed of three party for making a trust.
i. The settlor
ii. Trustee
iii. Beneficiary
 The settlor: The person who gave his/her property, money or anything for the benefits of
others is called the settlor.
His/her role is to legally transfer control of an asset to a trustee, who manages it for one
or more beneficiaries. The settlor must transfer his/her property to the trust, which is then
handled by trustee, or administrator, although the settlor may reserve specific powers for
him/her with respect to the trust. A settlor can make the whole procedure like how the
trust will work. Trustees are bound to follow the rules.
Suppose I have 10 Million BDT and I want to make sure that the money will used
properly only for the benefit of privilege people of the society. And so that I make a trust
with this amount of money so for that property I am the settlor.
 Trustee: Trustee are basically the person, financial institution or anything who are bound
to follow the settlor rules and work for the beneficiaries. Trustees are accountable,
employ or dispose of the assets in according to the terms of the trust and the special
duties imposed upon him by law. Breach of any duty imposed on a trustee, as such, by
any law for the time being in force, is called a “Breach of trust”.
Suppose I have some money and I want to spend it for the under privilege people of
Dhaka city and for this I have appointed A&B company. Here A&B company is trustee,
if they spend this money for the under privilege people of Rajshahi then it will called a
breach of trust. If this happen then I can easily dismissed the past contract.
 Beneficiary: A beneficiary of trust is the individual or group people for whom the trust is
created. Basically the beneficiary takes the benefits from the trust only. Sometimes
maybe they need to pay a little but it totally depends on how the trust is structured. The
law give some certain rights that beneficiaries hold. If beneficiaries suspect that the
trustee has breached his or her fiduciary duty to prudently manage trust assets with due
care, beneficiaries can take legal action to replace or sue the trustee.
Let’s say about AIUB, The students are then beneficiary for AIUB because they take the
advantages.

According to Trust Act, 1882, unless there be something repugnant in the subject or context,
“Registered” means registered under the law for the registration of documents for the time being
in force. The main instrument of any public charitable trust is the trust deed, wherein the aims
and objects and mode of management (of the trust) should be enshrined. The salient features of
Trust are as follows:

Trust deed is something like where it is clearly written about the minimum and the maximum
number of the trustee. It is actually the structure of the trust. It follows that what is the aim of the
trust, how the trust should be managed, how other trustees may be appointed or removed, which
specific duty will controlled by the settlor.

This should be signed in front of two person without the settlor and trustee. Non-judicial stamp
paper, the value of which would depend on the valuation of the trust property. If stamp paper
value is not valuation the property value then the trust deed can be cancelled.

General requirement of making a trust

The application for registration should be made by the official having jurisdiction over
the region in which the trust is sought to be registered. After providing details in the form
regarding designation by which the public trust shall be known, names of trustees, mode
of succession, etc., the applicant has to affix a court fee stamp of a specified amount,
depending on the value of the trust property. The application form should be signed by
the applicant before the regional officer or superintendent of the regional office of the
charity commissioner or a notary. The application form should be submitted, together
with a copy of the trust deed. Two other documents that should be submitted at the time
of making an application for registration are affidavit and consent letter.

Kinds of Trust

 Express trust: If the trust was created verbally, in written or in expressed term and a
person is being nominated to be the trustee of the trust it would amount to express trust. If
the property is moveable then firstly it should be registered & have to physically
transferred to the trustee.
 Implied trust: An implied trust is also created by an act of the parties. It appears from
the conduct of the parties.
The conduct of the party creates presumption & also shows the intention of the parties.
 Public & private trust: A public trust under the trust law in India is one that is created
for the benefit of the public. In general, the public doesn’t mean the public as a whole.
The trust may be created for a part of the public & it will be valid trust so long as every
member of a particular class is permitted to enjoy the benefit of the trust. Examples of
general public purposes are- medical, health, social service, education, training, etc.
 Private trust: Private trust is made for a specified person so that no one left the one can
draw the benefit. Such a trust is enforceable at the private action of the intended
beneficiary.
 Secret Trust: Where neither the existence of trust nor its terms are disclosed, it is called
secret trust. In case the existence of trust is disclosed but its terms are not disclosed it is a
half secret. This is a misuse of the concept of trust.

Rights and power of trustee under trust law


 Right to title
A trustee is entitled to have in his possession the instrument of trust & all the documents
of title relating to the trust property.
 Indemnity from Gainer of breach of trust
Where a breach of trust has occurred and a person other than a trustee has received a
benefit from the breach, he will be bound to indemnify the trustee. Such indemnity is not
available to a trustee who has been guilty of fraud in breach of trust.
 Settlement of accounts
When the duties of a trustee have been completed, he is entitled to have the accounts of
his administration of the trust property examined and settled.
 General Authority of trustees
A trustee has the right to do all such acts that are reasonable & proper for the realization,
protection or benefit of the trust property & also for the protection of a beneficiary who is
not competent to contract. This is known as the general authority of the trustee.
 Power to convey
The completion of sale may require certain formalities (formality of conveyance). Section
39 gives the power of conveyance to the trustee. The section says that after the
completion of sale the trustee shall have the power to convey to the person as may be
necessary.
 Authority to deal with trust property under trust law
Where the authority to deal with trust property is given to several trustees and any of the
trustees disclaim or dies the authority may be exercised by the continuing trustee. This
will not be applied in those situations where the instrument of trust is specific on the
point that the trust executed only some specific number of trustees.
 Power to sell
Where a trustee has the authority to sell the trust property he may sell the property subject
to the charges or free of them. He may sell the whole property in one lot or in instalment
either by public auction or by the private at one time or at different times. But the trustee
can perform such activity when it is mentioned in the trust deed.
Liability of the trustee for breach of Trust

Where the trustee commits a breach of trust, then he is liable to compensate the
beneficiary or the trust property which loss sustained unless the beneficiary has by
fraud induced the trustee to commit the breach.
A trustee committing a breach is not liable to pay in some following cases-
When he has received interest, that means if the trustee uses the trust property outside of
the beneficiary and the trust got a certain amount of interest or monetary value then it will
not be a breach of trust.
Where a breach of trust in two distinct forms, one causing loss & the other brings
profit, the trustee cannot say that his liability for the loss should be reduced by set
off against it the gain in simple words if breach of trust cause loss the trustee has
to bear. If it brings gains it will go the benefit of trust property.
The general thing is that a trustee is not liable for the breach of trust committed by
any one of his co-trustees.
According to Section 26 of trust act 1882, where the trustee is liable for the
breach of his co-trustees. Where he has delivered the trust property of his co-
trustee without seeing to its proper application. Where he comes to know of a
breach of trust committed by his co-trustee or intended to commit & trustee
doesn’t take proper steps to protect the interest of the beneficiary.

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