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Possibility of a Trust where a Minor is benificiary
06-Feb-2023 (In Wills / Trusts Law)
Is it possible to have a company and three individuals collectively as settlors of a single trust whose benificiary is a Minor? please support the answers with legal substance and cases.
Case Law: H. B. Yeshwant Rao Ghorpade vs The Commissioner Of Wealth Tax.
If trust property happens to be immovable property: A registered document (trust deed) is necessary to set up a trust if immovable property is being transferred to it. The deed should be made out on stamp paper (for stamp duty consult your civil lawyer) and registered with the Registrar of Assurances under the Registration Act.
If trust property happens to be movable property
If only movable property is settled upon the trust, no formal document or written agreement is necessary. All the same, it’s advisable to prepare a trust deed on a stamp paper and have it signed by the settlor and the trustees in the presence of a witness to avoid any subsequent disputes.
Once the trust is set up, the settlor can contribute more funds to it as and when he wants to. Even trustees, as also friends and relatives, can gift funds to a trust. Since gift tax has been abolished, no such tax is payable on the amount gifted to the trust.
If trust property happens to be immovable property: A registered document (trust deed) is necessary to set up a trust if immovable property is being transferred to it. The deed should be made out on stamp paper (for stamp duty consult your civil lawyer) and registered with the Registrar of Assurances under the Registration Act.
If trust property happens to be movable property
If only movable property is settled upon the trust, no formal document or written agreement is necessary. All the same, it’s advisable to prepare a trust deed on a stamp paper and have it signed by the settlor and the trustees in the presence of a witness to avoid any subsequent disputes.
Once the trust is set up, the settlor can contribute more funds to it as and when he wants to. Even trustees, as also friends and relatives, can gift funds to a trust. Since gift tax has been abolished, no such tax is payable on the amount gifted to the trust.
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Adv. Siddhant Sharma
Delhi | 500+ Answers
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Dear querist,
In response to your query for a minor to be a beneficiary of a trust. The response is affirmative, Yes a minor can be the beneficiary of a trust, there is no legal impediment to the same.
In response to your query for a minor to be a beneficiary of a trust. The response is affirmative, Yes a minor can be the beneficiary of a trust, there is no legal impediment to the same.
Helpful?
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Adv. Saket Bisaani
Bangalore | 100+ Answers
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