Testamentary Trusts and the Indian Succession Act, 1925

A trust need not be created during the author's lifetime. Section 5 expressly allows a trust, even of immovable property, to be declared by will, and Section 6 excuses a testamentary trust from the requirement of an immediate transfer to the trustee. Testamentary trusts are among the most common private trusts in India: they provide for minor children, dependants, family businesses and charities after the testator's death. But because they are created by will, they sit at the meeting point of two laws: the Indian Trusts Act and the law of wills, principally the Indian Succession Act, 1925. This note explains how the two fit together.

1. Creation by Will

Under Section 5, a trust of immovable property is valid if declared "by the will of the author of the trust or of the trustee", and a trust of movable property may be declared the same way. Under Section 6, a trust is created when the author indicates the four certainties with reasonable certainty, and the requirement to transfer the property to the trustee does not apply "where the trust is declared by will". The property reaches the trustee through the administration of the estate after death.

Two consequences follow. First, the will itself must be valid: if it fails, the trust fails with it. Second, the testamentary trust takes effect only on death; until then the testator remains free to change or revoke it.

2. Validity of the Will

Community	Governing law	Key requirements
Hindus, Buddhists, Sikhs and Jains	Indian Succession Act, Part VI, as applied by Section 57 and Schedule III; Hindu Succession Act, 1956, Section 30	Writing, signature of the testator, attestation by two witnesses (Section 63); a Hindu may dispose of his separate property and his interest in coparcenary property by will
Christians, Parsis and others governed by the Act	Indian Succession Act, Part VI	Writing, signature and two attesting witnesses for an unprivileged will (Section 63)
Muslims	Muslim personal law	No particular form; an oral will is valid. Bequests are limited to one third of the net estate, and a bequest to an heir, or beyond one third, needs the consent of the other heirs given after the testator's death

Registration of a will is optional (Registration Act, 1908, Section 18). A trust of land declared by a valid unregistered will is therefore effective, even though a non-testamentary trust of the same land would need registration under Section 5. In some areas, chiefly wills made within the original presidency towns, probate is required before an executor can establish rights under the will in court (Indian Succession Act, Section 213).

3. Limits on Testamentary Trusts

The Indian Succession Act, Part VI, contains rules that limit what a testator can achieve by trust. Section 7 of the Trusts Act makes the author's power subject to these laws.

Rule	Provision	Effect on trusts
Bequest to a person not in existence	Section 113	Where a bequest is made to a person not in existence at the testator's death, subject to a prior bequest, it is void unless it comprises the whole of the testator's remaining interest
Rule against perpetuity	Section 114	No bequest is valid where vesting is delayed beyond the lifetime of persons living at the testator's death and the minority of some person then in existence
Directions to accumulate	Section 117	Accumulation of income is allowed only within the periods the section permits; an excessive direction is void as to the excess
Bequests for religious or charitable uses	Section 118	Formerly restricted such bequests by Christians with close relatives; struck down as unconstitutional in John Vallamattom v Union of India (Supreme Court, 2003)

⚠ Note

Bequests for public religious or charitable purposes are outside the Indian Trusts Act (Section 1) but can still be created by will. They are governed by the law of public trusts and, where applicable, State public trust laws (Part J). The rule against perpetuity does not apply to gifts for public charitable purposes.

4. Executor and Trustee

A will usually appoints executors to administer the estate, and may appoint the same or different persons as trustees to hold particular property on continuing trust. The two roles are related but distinct.

Function: the executor collects the estate, pays debts and expenses, and distributes the residue according to the will; the trustee holds the trust property for the beneficiaries on the terms of the trust, often for many years.
Source of title: the estate vests in the executor on death (Indian Succession Act, Section 211); the trust property passes to the trustee when the executor assents to or transfers it.
Duration: the executor's role ends when administration is complete; the trust continues until it ends under Section 77.
Governing law: the executor is governed by the Indian Succession Act; the trustee by the Indian Trusts Act.

Where the same person is both, he holds as executor until administration is complete and thereafter as trustee. The transition is often marked by the executor's assent, which completes a legatee's title (Indian Succession Act, Section 332). An illustration to Section 10 of the Trusts Act confirms that persons named as executors and trustees who prove the will thereby accept the trust.

5. Revocation

Section 78 of the Trusts Act provides that a trust created by will may be revoked at the pleasure of the testator. This follows from the nature of a will, which is ambulatory and revocable until death (Indian Succession Act, Section 62). Once the testator dies, the testamentary trust becomes subject to the ordinary rules: it can then be ended only in the ways Section 77 and Section 78 allow for other trusts (Topic 31).

6. Common Uses of Testamentary Trusts

Provision for minors: property is left to trustees to apply income and capital for children's maintenance and education until they reach a stated age.
Provision for dependants with special needs: a trust secures lifelong support without giving the dependant control of the capital.
Life interest and remainder: a spouse receives income for life, and the capital passes to children on the spouse's death; Section 16 then requires the trustee to balance the interests of successive beneficiaries (Topic 14).
Family business succession: shares are held by trustees who vote them on agreed principles, keeping control together.
Charitable gifts: a residuary estate or a fixed sum is left for a public charitable purpose.

⚠ Key point

A trust may be declared by will (Section 5) and needs no transfer in the testator's lifetime (Section 6). Its validity depends on a valid will under the Indian Succession Act, 1925 (writing, signature and two attesting witnesses for an unprivileged will) or the applicable personal law (for Muslims, oral wills and the one third limit). Testamentary trusts are subject to the Succession Act's rules on unborn persons, perpetuity and accumulations. The executor administers the estate; the trustee then holds on continuing trust. A trust created by will is revocable at the testator's pleasure until death (Section 78).

7. Related Topics and Provisions

Creating a trust (Topic 8): Sections 5 and 6
Classification of trusts (Topic 5): testamentary and inter vivos trusts
Extinction and revocation (Topic 31): Sections 77 to 79
Family trusts and estate planning (Topic 54)