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Transfer of trust property by the beneficiary:

The beneficiary can (where there is one beneficiary or if there are several beneficiaries and all of them agree) direct the trustee to transfer the trust property to him (if there are several beneficiaries to all of them) or to such other person as the beneficiary (or the beneficiaries may desire).

A beneficiary can also transfer his interest in the trust property and every person to whom a beneficiary transfers his interest acquires the rights and liabilities of the beneficiary at the date of the transfer. But such a transfer can be sought or made by the beneficiary (or the beneficiaries as the case may be) only if they are of the age of majority with sound mind and are not disqualified by any law for the time being in force in India.

In case the beneficiary is a married woman and the trust property has been bequeathed to her via the trust to ensure that she would not deprive herself of her beneficial interest the trust property cannot be transferred at her instance as aforesaid.

  • Documents and accounts of trust property
  • The beneficiary has a right to inspect and take copies of the instrument of the trust, the documents of title relating solely to the trust property , the accounts of the trust property and the vouchers if any by which they are supported and as well the cases submitted and opinions taken by the trustee from the court for his guidance in the discharge of his duty.

    Protection of trust and trust property

    • Where a trustee has wrongfully bought trust property the beneficiary has aright to have the property retransferred by the trustee or to have such property declared subject to the conditions and safeguards of the instrument of trust.<
    • Where a third person acquires the trust property inconsistently with the trust, the beneficiary can file a suit to seek declaration that the property belongs to the trust. But such a declaration cannot be obtained if the third party has obtained the property in good faith by making due payment and without having notice of the trust <
    • However, in such cases, the beneficiary can claim the money obtained by the trustee on selling the trust property from the trustee or his legal representatives .<

    Liability of beneficiary

    If one of several beneficiaries facilitates or partakes in the breach of trust committed by the trustee or deceives a trustee and induces him to commit a breach of trust or fails to take proper steps to protect interests of other beneficiaries after he becomes aware of the intended or committed breach of trust, he is liable to such all other beneficiaries. These other beneficiaries can impound all the beneficial interest of such liable beneficiary until the loss caused by breach of trust is compensated.

    Discharge of a trustee

    The office of a trustee is vacated by his death or by his discharge under the provisions of the Indian Trusts Act, which envisages following six modes of discharge for a trustee.

    1. by extinction of the trust
    2. by the completion of duties under the trust<
    3. by such means as may be prescribed by the instrument of trust
    4. by appointment of a new trustee in his place
    5. by consent of himself and all the beneficiaries provided the beneficiaries are of the age of majority and have sound mind and are not disqualified under any law
    6. by the court by filing a petition for discharge.

    A trustee can apply to a principal civil court of original jurisdiction for seeking discharge from his office. If the court finds that there are sufficient reason for such discharge, it may discharge him accordingly. In such a case, the cost of litigation is paid out of the trust property. But if there is no sufficient reason, the court cannot discharge such a trustee unless a proper person can be found to take his place.

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