Express Trust

Overview

Express trust is a legal tool used by individuals and organisations for the purpose of managing their assets. It is a very versatile instrument that can be employed to achieve numerous objectives, such as wealth protection, asset distribution, tax minimisation, and more. When it comes to setting up an express trust in India, there are a few steps one must take in order to ensure its validity and efficacy.

Generally, law requires only a simple formality to create an express trust. In certain jurisdictions, an express trust may even be stated orally. Typically, a settler would record the temperament, where the real property is to be held in trust or the value of property in the trust is large. Where legally the title to the property is being transferred to a trustee, a 'settlement deed' or 'Trust Instrument' may be used. Where the property is to be continuously held by the person making the trust, a 'declaration of trust' will be appropriate.

Elements of Express Trust

An express trust is a trust established through the deliberate action of a settlor, usually documented in writing. During trust registration, the settlor transfers legal ownership of the property to a trustee, who becomes responsible for holding and administering the assets on behalf of one or more beneficiaries. The specific terms and conditions governing the express trust are typically outlined in a written trust agreement.

The elements of an express trust are:

Irrevocable express trust:

An irrevocable express trust is one where the settlor (person creating the trust) cannot make any changes to the terms of the trust without the consent of all the beneficiaries. This type of trust gives more certainty to the beneficiaries as they know that the terms of the trust cannot be changed without their agreement.

Benefits of Express Trust

• Asset Protection: An express trust can help protect your assets from creditors and lawsuits.
• Management of Finances and Property: If you have complex financial or property holdings, an express trust can help you manage these assets more effectively.
• Transfer of Wealth: An express trust can be used to transfer wealth to your beneficiaries in a tax-efficient manner.
• Flexibility: An express trust can be structured to meet your specific needs and goals.

Checklist for the creation of the trust

The following features have to be present.

• To create an express trust, you must have the intention to create a trust. This intention must be manifested in a clear and unambiguous manner
• The trust property must be identified and separated from your other property
• The beneficiaries of the trust must be clearly identified
• The trustee must be willing and able to accept the trusteeship
• The terms of the trust must be reduced to writing.

How to Register for Private Express Trust

If you would like to register your Express Trust in India, there are a few things you need to do. First, you need to have the documents required for registration. These include the trust deed, registered address, and registered phone number. You will also need to have the original copy of the PAN card and two passport-size photographs.

Next, you need to fill out the application form and submit it along with the required documents. Once your application is received, the registrar will review it and approve it. Once approved, you will be given a registration number which you will need to keep for future reference.

Documents Required for the Registration of Private Express Trust

• The trust deed, signed by the settlor and witnesses
• A list of the trustees and their addresses
• The names and addresses of the beneficiaries
• A declaration by the settlor confirming that they are not aware of any debts or liabilities owed by the trust or any of the trustees
• The registration fee.

Why Vakilsearch?

We have a team of experienced legal professionals who can help you with every step of the process, from drafting the Trust deed to registering it with the relevant authorities.

We offer a hassle-free and affordable service that will save you time and money.