Duties and Liabilities of Trustee under Indian Trust Act

The Indian Trusts Act 1882 codifies the laws governing trusts and personal trustees. The term 'inam' can trace its origins to dharmashalas, annachatras, sadavarts, educational and medical institutions, the construction of water tanks, and the desire to donate property for charitable and religious purposes. well etc.

What is Trust?

According to Section 2 [3] of the Indian Trusts Act, 1882, the definition of "trust" is, "trust means an obligation attached to the ownership of property and arising from a belief assumed and accepted by the owner; or expressed and accepted for the benefit of another person or persons another and have."

Terms of the trust are as follows 

  • The person who revokes or declares the trust is the author of the trust.

  • The person who receives the trust is known as the patron.

  • A beneficiary is someone who benefits from a trust. Beneficiary interest is beneficiary interest.

  • Trust property or trust money is a trust matter.

  • Trusts are usually created for the benefit of a group of people or individuals.


The Trustee is the person appointed to manage the assets of the Trust. A trustee must have the capacity to hold property and contracts.

  • A trustee can be a corporation, which is an artificial person created by law.

  • A fiduciary must accept or reject the trust given to him, either expressly or by his actions.

  • A trust can have more than one trustee.

  • The issue of guardianship is dealt with in Section 10 [5] of the Trust Act.

  • The section states that "any person capable of holding property may be a trustee."

  • Corporations can be trustees because they can assume ownership of property that is responsible for the benefit of other people or groups of people. There are no statutory restrictions against sponsoring companies. A person is not obliged to accept a belief.

Under English law, a stranger can be a guardian; but not under Indian law.

  • A faithful person can be a married woman.

  • A confident person can be a baby. On the other hand, small children cannot gain the trust of society.

  • An unemployed person can be a sponsor.

  • A foster mother can be an illegitimate child.

Instead of accepting the trust, the intended guardian can refuse it. However, it must be done at some point. Under Indian trust rules, objections will prevent the transfer of trust property. If more than one proposed trust is rejected, the property will be handed over to another or to another person and he or she will be the sole or joint trustee.

Duties and Liabilities of Trustee

The Indian Trusts Act 1882 lays down various duties and responsibilities for trustees which we will discuss in detail −

  • Trust enforcement – The trustee is responsible for carrying out the purpose of the trust as set forth in the trust agreement. The Trustee must also follow the instructions given by the Author of the Trust when the Trust was established. If the instructions are impractical or illegal, the administrator is not obliged to follow them.

  • Acquaintance with trust assets – The trustee must be aware of the details, whereabouts and current status of the trust assets and must also take reasonable security precautions.

  • Protection of title to trust property – The trustee must defend all claims against title to the trust property and take reasonable steps to enforce and protect title.

  • Not to create title adverse to beneficiary – The trustee is entrusted with the trust property and is expected and required to keep it in good working order for the beneficiary. Consider the following scenario: a trustee is entrusted with real estate and is required to apply the rents and income from the real estate to the beneficiaries.

  • Taking care of trust assets – The trustee is required to put in place reasonable safeguards and handle trust assets with the same care that an ordinary person would use with their own. The trustee, on the other hand, would not be liable for the loss of the trust property or the benefits arising from it if the ordinary person was prudent with his property under the law.

  • Conversion of perishable property – if the trust property is of such a nature that it would deteriorate over time and lose value, the trustee is forced to convert the property, i.e. sell it and convert it into cash proceeds and use the proceeds for the benefit of the beneficiaries. . This is especially true when the trust is established for the benefit of many people in succession.

  • Be impartial among beneficiaries – When a trust is set up for the benefit of multiple beneficiaries, the trustee is required to distribute the benefits of the trust property fairly among the beneficiaries without favoring anyone or any group of beneficiaries.

  • Protect the assets of the trust from an adverse beneficiary – if there are many beneficiaries of the trust and one or more of them commits or threatens to commit an act that would harm the interests of the other beneficiaries and the trust as a whole, the trustee is obliged to take measures to prevent such conduct.

  • Keep books and accounts – The Trustee is required to keep a clear and accurate account of the Trust's assets and deliver it to the Beneficiary at all times upon request.


A cursory perusal of the Indian Trust Act shows that apart from the statutory features, the obligations and powers of the Act are intended to maintain the fragile relationship of trust, which enables the trust to be maintained and the purpose for which the trust was established fulfilled. Consequently, we may now turn to the duties and powers of a trustee as defined by the Indian Trust Act, 1882.

Frequently Asked Questions

Q1. What is the liability of trust members?

Ans. The trustee is responsible for compensating the beneficiary or the trust property for any loss experienced as a result of a breach on the trustee's part.

Q2. What are the three duties of the board of trustees?

Ans. The general fiduciary duty requires a trustee to put the organization's interests ahead of their own while making decisions on its behalf. This duty is comprised of the obligations of care, obedience, and loyalty.

Q3. What are the duties and liabilities of trustee?

Ans. According to Indian trust law, a trustee has a responsibility to maintain clear and accurate records of the trust property and to provide beneficiaries with complete and accurate information upon request at all reasonable times regarding the quantity and condition of the trust property.

Updated on: 09-May-2023

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