In simple words, a trust is nothing but the transfer of property by the owner to another person on whom the owner has confidence and faith for the benefit of a third person like children/ grandchildren or other beneficiaries who are going to inherit the property. Term Property is not only restricted to real estate. It might be cash, shares or other valuable assets. The trust is formed by a document which is simply called “trust deed”or “instrument of trust”.
There are two types of trust:
Private Trusts: a personal trust is made for a closed group of individuals or beneficiaries. Here the receiversare easily identified as children, relations or relatives. A trust established for the children, family and relatives of the author is an example of personal trust.
Public Trusts: A trust formulated to serve an outsized number of individuals or society in large. The classic examples are Non-Profit NGOs and Charitable Institutions established for the welfare of the overall community. Public trust is additionally called a charitable trust as they created for the overall charity and contribution of the public.
First of all decide on appropriate and unique name for Trust. The name should not violate or infringes someone else name or trademark.
The next step is to draft the trust deed having details of all the parties to the deed like the author of the deed, trustee and the beneficiary.
After trust deedpreparation, it is mandatory to do the registration of this document with the registrar of the trusts in thearea of jurisdiction.
Registration Process After submission of form with all the document,trust is registered and original registered copyof the Trust Deed is returned.
After successful registration of the trust, apply for allotment of PAN and TAN number and bank A/C for the trust.
A charitable trust is set up for the mutual purpose of getting involved in charitable activities while accruing certain benefits and welfare for himself, his inheritors, and successors. Other valid reasons why people set up a charitable trust are to avail tax exemption benefits. Charitable trusts are non-profit organizations and work for the benefits of others and society in large. Though, to avail of all available benefits, the charitable trust must have a legal entity. Being a legal entity this could be achieved by means of Charitable Trust Registration, as per the process as defined under the Trust Act and the Federal laws.
The purpose that a charitable trust is often created is the advantage of the general public and society. Therefore the same must be clearly mentioned within the deed of trust because it guides the overall functioning in the course of time. Generally, a charitable trust is made for welfare of weaker section of society, fixing an institute, colleges, other educational initiatives, hospitals, old age homes, orphanage, for promotion of kid health and their empowerment, and for accomplishment of Corporate Social Responsibilities (CSR) by corporate under section 135 of the businesses Act, 2013.
The registration of Trust or deed of trust Registration is ideally the one and same thing and every state have a predefined and a definite process for trust registration. As such, there is no formal and uniform trust registration form, only the necessary documents are required to register a trust which is the deed of trust and KYC documents of its author, trustee, and witness of the deed of trust.
In the trust registration process, the deed of trust does not require any specific certification from a professional consultant, however, but the services of a consultant can be taken for correct drafting and mentioning the objectives in the deed of trust. Also, a consultant can help and streamline the process of obtaining the appointment with the registrar of trusts and other operational assistance while being present within the registrar office for registration of the deed.