Other type of Trust are Public or Charitable Trust where the objective may be for public welfare or religious activities or sports or medical purpose or education etc. where general public also can give donations. However, such trust are regulated by the Charity Commissioner’s Office and other laws like Income tax and Property laws.
A Private or Family Trust is like creation of a new family member to take care of certain wealth / assets. Such Trust do not require any Government approval or any intervention of any outsiders / Government (i.e. Charity Commissioner Office or Income Tax Office) etc.
Private Family Trust is created for various reasons to continue keeping overall control even after demise, like:
- To take care of Special Child;
- To take care of Family, Parents, Medical Needs, Marriages, Education etc.
- To avoid inheritance taxes in certain developed countries
- To create safe fence around wealth or to keep wealth cross border
- To distribute wealth to family after few years due to their young age
- To manage business succession in a time-bound manner
Creation of family trust in India can be created in couple of weeks with following actions:
- Decide objective or purposes of Trust
- Decide names of Beneficiaries
- Decide names of Trustees
- Decide address of Trust
- Decide how much assets to be transferred on creation
- Decide rules of Trust management
- To prepare Trust Deed
- Signing and Registration
- Apply for PAN
- Open a Bank Account
- Deposit initial Trust fund
- Transfer other assets / immovable properties / business
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