Private trust created for the benefit of a minor child can invest in mutual fund
1 min read . Updated: 28 Aug 2019, 12:06 AM IST
Premium- Under the provisions of the Indian Trusts Act, a private trust can invest in mutual funds, shares, and so on
- If a person dies intestate (i.e. without leaving a Will), the applicable laws of succession relating to the religion of the deceased will apply
I want to create a private trust for a minor. I mainly wish to invest in mutual funds from the trust. What should I include in the trust deed?
—Neel Shah
You can create a private trust under the provisions of the Indian Trusts Act, 1882, where you can be the settlor and/or the trustee for the benefit of the minor child, who is the ultimate beneficiary. You can provide for all such events where you wish your child becomes entitled to some funds or liquidate the trust assets with certain capping. Under the provisions of the Act, a private trust can invest in mutual funds, shares, and so on, as desired by you.
My mother died about 15 years ago and she is survived by three daughters. Our father remarried a widowed woman, who already had a daughter from her previous marriage who was adopted by my father thereafter. The stepmother keeps threatening us that she would throw us out of the house and would trick our father into transferring the house and other properties in her name. Can she do this?
—Name withheld on request
We assume that the properties together with the house are absolutely owned by your father. In such a scenario, your father can transfer the property to whomsoever he desires during his lifetime vide instruments like deed of transfer or gift or a Will. In the event that he dies intestate (i.e. without leaving a Will), the applicable laws of succession relating to the religion of the deceased will apply, i.e., Hindu Succession Act, 1956 or Indian Succession Act, 1925 or any other, as the case may be, and his properties will devolve upon his heirs as per the relevant provisions of the applicable laws. We assume that your father is a Hindu and if he dies intestate, then his property will devolve upon his widow and all daughters, including the adopted daughter, in equal shares if she is adopted under the provisions of the Hindu Adoptions and Maintenance Act, 1956 or under a valid decree of a court of competent jurisdiction.
Aradhana Bhansali is partner, Rajani Associates. Queries and views at mintmoney@livemint.com
