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Mousumi Sen (Owner)     15 March 2015

Question regarding trust property

My grandfather (Settlor) conveyed, granted and transferred one of his self acquired immovable properties to my grandmother (Trustee) by a registered and stamped Deed of Settlement, for the absolute benefit of the Trustee and  with full rights to transfer, sell and make gift.

 

Subsequently after a few years my grandmother made a Joint Will (unregistered) with her husband wherein it is said that upon their death all their properties are conveyed, granted and transferred to a Board of Trustees, comprising their five sons and two daughters. Further similar to previous case this is for the absolute benefit of the Board of Trustees with full rights to transfer, sell and make gift. Additionally there are some restrictions given in this Will regarding the Settlors properties.

 

Also in this Will, my father has been given the majority of the premises to enjoy, so the other Trustees are disputing this Will on the pretext that my grandmother could not have opted for this testamentary Trust when there is already a Trust running. What I think is that the first Trust was for the lifetime of my grandmother and it would have extinguished anyway upon her death so creating a Trust for after her death is valid.

 

Today both the Settlors as well as all their children are expired and we are the designated Trustees in the present generation from the Will. This Will has now been submitted for probate when controversies arose but it is being contested.

 

Now my questions are:

1. Is the Will valid?

2. Are the trustees here  only usufructs of the property? Also are the trustees a cestui qui Trust?

3. Can Trustees have any official share in the property or are mere beneficiaries (naked owners) since property has been bequethed to the Board of Trustees?




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 6 Replies

Adv Akhtar Ali Sheikh (Property Law Consultant)     15 March 2015

Upon she being made a beneficiary of an immoveable property under a registered trust, she becomes absolutely entitled to the property. So she is free to deal with the property including to make a Will also.

Your grand father in deed of settlement of trust could have been a trustee too apart from being the settlor. If yes your grand father's role will be determined by the contents in the Trust Deed. If he had reserved any rights for himself also then he could have the discretion of making a joint Will.

If he did not reserve any right for himself  the part of the Will attributable to your  grand father will be of no consequence. While the one ascribed to your grand mother would be deemed to be the valid Will. Since she was the absolute beneficiary under the trust, she could bequeath the property the way she liked hence full effect will accrue as per the contents of the Will.

The Board of Trustees is not a different entity, they are the 7 people and they are the beneficiaries, since none of them is alive today their respective legal heirs would be entitled to the share/s relatable to their respective parent.

The argument of the opposite trustees would not be tenable because your grand mother did not have any locus to decide (and she need not have any say) as the same was conferred to her by her husband and she was a consenting party and it was absolutely gratis to her.

1. The first answer to first question is Yes, the Will is valid,

2. The individual members are entitled to the benefits.

3. The board of trustees comprises of the individual members of the heirs of 7 children of your grand parents. Moreover it cannot vest in the Board of Trustees because under Sec. 6 of the Indian Trust Act, 1882, the beneficiary should be reasonably certain and identifiable, since in the beginning they were certain and identifiable and now they are no more so naturally the benefits must accrue to respective legal heirs.

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Mousumi Sen (Owner)     16 March 2015

Thank you sir for your reply. My grandfather was not a Trustee in the Deed of Settlement as the property was transferred totally to my grandmother. However the Settlors did a Joint Will later on as my grandfather had other properties too besides the one he gave to my grandmother.


The Joint Will however also says that after the initial 7 Trustees/beneficiaries, their heirs would be the members of this Board of Trustees. The benefits would be staying in the property and receive income from the property. If however the property is sold in the future with unanimous consent,  then Trustees/beneficiaries would be entitled to a percentage of the sale proceeds as also outlined in the Will.


Therefore can't it be said that Trustees/beneficiaries are like Usurfucts and do not have any direct share in the property as Title has been vested with the Board of Trustees? Consequently they cannot ask for partition of this property especially when some heirs are not willing?

Mousumi Sen (Owner)     17 March 2015

Dear advocates, I will be highly interested to know whether a court of law can pass a decree about individual shares in this aforesaid Trust assigned collective property and partition the property in metes and bounds when some of the Trustees including me are unwilling?

Adv Akhtar Ali Sheikh (Property Law Consultant)     17 March 2015

There are preliminary questions.

Since settlor was not the trustee - he would have relinquished all rights to his wife and hence the property would be deemed to have been usable enjoyable by the wife i.e. grandmother alone.

Since the property has fully vested in her she is free to do whatever she wants,

So she makes a joint will, but her husband did not have any interest left in the property hence his being a party to the will along with her is not going to have any bearing and any thing attributable to him in the will is liable to be expunged or to be ignored.

She can very well will the property the way she wants.

And she chose to declare another trust i.e. the Board of Trustees and since it involves presence of Immoveable property hence the Board of Trustees trust must be registered either by her before her death or after her demise by the executor/s and all the property must have been incorporated in the new trust to be known as board of trustees. If all this has happened which i think has not happened because it it in the probate stage so it comes again back to square one. SO UNLESS EVERYBODY AGREES YOU HAVE TO WAIT FOR JUDGMENT and the judgement would be on the basis of contents in the will if proven correct.

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Adv Akhtar Ali Sheikh (Property Law Consultant)     17 March 2015

Since during the probate proceedings there is no consensus, this petition has got converted into a regular suit and will be decided on merits and all aspects would be looked into by the court, If will is proved the division will be as per the contents in the will otherwise on the basis of entitlement of each heir.

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Mousumi Sen (Owner)     17 March 2015

Thank you Adv Akhtar Ali Sheikh for some excellent replies. Many of my queries are hereby deemed to have been resolved as per your analysis.


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