The Indian Trusts Act, 1882

The Indian Trusts Act, 1882, enacted as Act No. 2 of 1882 and dated 13 January 1882, defines and amends the law relating to private trusts and trustees. The text includes later amendments and identifies some provisions as repealed. It came into force on 1 March 1882.

What the law governs

The Indian Trusts Act, 1882 defines a trust as an obligation attached to property ownership, arising from confidence accepted or declared by the owner for another person's benefit, or for the benefit of that person and the owner.

The law identifies the author of the trust, trustee, beneficiary, trust property, beneficial interest and instrument of trust. It also covers:

• Creation and extinction of trusts.
• Duties, liabilities, rights, powers and restrictions of trustees.
• Rights and liabilities of beneficiaries.
• Appointment, discharge and replacement of trustees.
• Obligations that operate in the nature of trusts.
• Protection of certain transferees and bona fide purchasers.

Creating a trust over property

The Indian Trusts Act, 1882 requires a trust concerning immovable property to be declared either by a written instrument, signed by the author or trustee and registered, or by the will of the author or trustee. The text states that these requirements do not apply where they would operate to carry out a fraud.

For movable property, the trust must be declared in the same manner or ownership must be transferred to the trustee. A trust is created when the author indicates with reasonable certainty:

• An intention to create a trust.
• The purpose of the trust.
• The beneficiary.
• The trust property.

Unless the trust is created by will or the author is the trustee, the trust property must also be transferred to the trustee.

Who may be affected

The Indian Trusts Act, 1882 is relevant to people creating private property trusts, trustees accepting responsibility for property, beneficiaries, and buyers dealing with property that may be trust property. A trust may be created for a lawful purpose by a person competent to contract. A minor may create one, or have one created on the minor's behalf, with permission from a principal Civil Court of original jurisdiction.

Every person capable of holding property may be a beneficiary. A proposed beneficiary may disclaim the interest.

Exclusions and limits

The Indian Trusts Act, 1882 does not affect Muhammadan law rules concerning waqf or customary or personal law governing members of an undivided family. It does not apply to public or private religious or charitable endowments, or trusts for distributing prizes taken in war among captors. Its chapter on creating trusts does not apply to trusts created before 1 March 1882.