• Creation of trust for disabled child

What are the provisions and recommendations for forming a trust for your child who will never be able to take care of herself? HUF is enough? 

- Can it be formed while the father and mother is alive? 
- Who all can be made trustee, what happens in case of their death?
- What loop holes to avoid so that it is not easily challenged in future? eg - how can we prevent daughter's husband and child from claiming share of the assets while my daughter is living or dead?
Asked 3 years ago in Property Law
Religion: Hindu

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6 Answers

Only a temporary trust can be created till the life of  child, for the benefit Following  is the procedure  for creation and registration  of trust under Trust Act, 1882…

  1. A trust can be created for any lawful purpose.
  2. The first person who crates trust is known has author of trust. He has to execute a trust deed stating the purpose of trust, the beneficiaries of trust, that is the persons for whose benefit the trust is created and the property of trust. The trust deed has to be executed between the author of trust and the persons appointed as trustees. The trustees should give undertaking in the trust deed that the property of trust will be used for the benefit of the beneficiaries of the trust.
  3. Select a name for trust.
  4. Draft a memorandum of association with the help of CA/Advocate.
  5. Draft a trust deed on stamp paper of 100.
  6. Submit an application for registration of trust to Sub-Registrar. A nominal fee is payable for registration of trust.
  7. The application has to accompanied with following documents…
  8. Trust deed.
  9. Proof of identity of author like aadhar, passport, voter id, driving license etc. the id proof should be attested by the author.
  10. Proof of identity of trustees like aadhar, passport, voter id, driving license etc. the id proof should be attested by the trustees.
  11. Proof of address of office.
  12. If the property is rented NOC from landlord.
  13. After completion of process, the Registrar is expected to register the trust within seven days. After seven days collect the certificate of registration .

Ravi Shinde
Advocate, Hyderabad
5133 Answers
42 Consultations

Yes HUF is enough but you can also form private trust also

Prashant Nayak
Advocate, Mumbai
34529 Answers
249 Consultations

Parents can form trust for disabled child 

 

2) parents can be trustees 

 

3) there should be provisions in trust deed for appointment of new trustees on parents demise 

 

4) your son in law cannot claim share in property vested in trust 

Ajay Sethi
Advocate, Mumbai
99796 Answers
8147 Consultations

A special needs trust is a trust designed for beneficiaries with disabilities, either physically or mentally challenged.

The parents can be trustee too.

It is difficult to think about who will care for your child if you are unable to do so yourself. But it is even more difficult if your child has a disability. Parents of special needs children should take extra care in choosing a guardian. Depending on the degree of your child’s disability, he or she may have greater needs and require special care and attention through adulthood.

The Trustee’s job is not to provide money whenever the beneficiary wants it, but rather to only give out funds when they are to be used for services under the terms laid out in the Trust. In other words, the Trustee has all the power. Thus, it is important to have a Trustee that knows the person’s needs, knows the laws relating to Special Needs Trust,

It is also important to choose a person that has the child’s best interest in mind and who knows what the child’s needs are. As the person ages, his or her needs may change so it is important for the Trustee to be aware of the person’s condition and future needs.

T Kalaiselvan
Advocate, Vellore
89995 Answers
2496 Consultations

Dear Client,

A trust can be formed when the parents are alive.

  • Draft Trust Deed as per wishes / rules and beneficiaries
  • Decide Trustees
  • Register Trust with Registration authorities
  • Transfer assets to Trust with payment of required stamp duty
  •  For Trust via Will – draft Will and Trust Deed, attached draft Trust Deed with Will, sign Will as per Will requirements.

And if trustee dies ? Well, it all depends on the Trust document and the terms described therein. The Trust document may have designated a successor trustee and a co-trustee. If this is the case, the co-trustee continues with the trust administration process.

Thank You

Anik Miu
Advocate, Bangalore
11017 Answers
125 Consultations

- As per the Indian Trust Act Parents, Grandparent or Legal guardian can set up a trust for the special needs child future and they can manage the affairs for the betterment of the special needs child.

- Further, the drafting of the trust deed is the most crucial element because this will be the basis on which the trust will function and hence mention all the  rules and power of trustees, management of funds, , income distribution to the beneficiary, the winding up of trust .

- Further, this deed must clearly mention the following factors: -

  1. The age of your child.
  2. Nature and the long-term prognosis of their disability.
  3. The value and type of assets you wish to place in the Trust.
  4. The needs of your child.
  5. Who will care of the disabled child in case of death of parents.

- Hence, parents can formed a trust for the disabled child during his life time.

- The deed must mention that who will be trustee in case of death of parents , and further the parents can also write a WILL during his life time in favour of disabled child after giving all the details .

- Legally, daughters husband having no right over the assets and against the WILL executed by the parents of the child . 

Mohammed Shahzad
Advocate, Delhi
15814 Answers
242 Consultations

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