IndiaFilingsIndiaFilings

Our Clients

  • Iinvolve - IndiaFilings Client
  • Duracool - IndiaFilings Client
  • Joyalukkas - IndiaFilings Client
  • Yes Bank - IndiaFilings Partner
  • Flipkart - IndiaFilings Client
  • Cello - IndiaFilings Client
  • EaseMyTrip - IndiaFilings Client
  • ICICI Bank - IndiaFilings Partner
  • Milton - IndiaFilings Client
  • DBS Bank - IndiaFilings Partner
  • Tirumala - IndiaFilings Client
  • Bombay Saving Company - IndiaFilings Client

Family Trust

We understand that every individual has unique financial goals and objectives. Our Private Family Trust services are tailored to meet your specific needs and provide personalised solutions that align with your vision for the future.

A family trust is one of the most effective tools for long-term wealth protection, tax efficiency, and smooth inheritance planning. We help you create legally sound private trusts that allow you to retain control over your assets while ensuring they are passed on exactly as you intend.

Whether you want to secure the financial future of your children, provide for dependents, protect vulnerable family members, or ensure business continuity, a well-structured family trust offers flexibility, confidentiality, and peace of mind.

Our expert team guides you through the process of setting up a trust, tailored to your specific goals, family structure, and assets – allowing you to build a legacy that is simple, secure, and stress-free.

What is a Private Trust or Family Trust?

At its core, a Private Trust (or Family Trust) is a separate legal entity that holds assets for the benefit of the Beneficiaries.

It is a crucial estate planning tool designed to protect assets, just like a Will, but it takes it a step further by helping to manage the assets rather than just transferring assets to your family when you are not around. It provides flexibility for those with various needs, from simple asset protection to supporting family members with special needs.

In India, a Trust is governed by a complex legal framework that includes various types of trusts, each serving different purposes and offering unique benefits.

The Benefits of Creating a Trust

A Private Trust (or Family Trust) is an advanced estate planning tool that provides significant advantages, ensuring seamless asset management, enhanced privacy, and the ability to protect and provide for your loved ones in a structured manner. Some benefits include:

  • Protection: A Trust can help safeguard assets from creditors, lawsuits, and other legal claims. It can also protect from inheritance tax or estate taxes, if applicable in your jurisdiction.
  • Preserve: A Trust can avoid probate formalities and ensure that your assets pass seamlessly to your beneficiaries without delay, even in unanticipated circumstances.
  • Provide: A Trust can provide financial security for your family members, care for minors or dependents, and for those with special needs.
  • Prevent: Creating a Trust can help prevent disputes and delays for family members by providing a clear structure that is difficult to challenge in court.

Key Components of a Trust:

  • Settlor: A Private Trust is established by a “Settlor”
  • Trustee: A "Trustee" is appointed by the settlor to manage asset distribution for the benefit of the Beneficiaries. They can be individuals or professionals.
  • Trust Deed: The entire arrangement is guided by a “trust deed” - a legal document that outlines the terms, conditions, and objectives of the Private Trust.
  • Beneficiary: The Beneficiaries are the family members, children, etc. who will receive benefits (income, proceeds from asset sales, etc.) from the Trust.

Key Concepts of a Trust:

FIDUCIARY RELATIONSHIP

The Trustee manages the Trust’s assets for the benefit of the Beneficiaries, ensuring a fiduciary duty to act in their best interest. This relationship is key to the Trust’s function, and requires the Trustee to act with loyalty and in a practical nature. In essence, this means that the trustee must manage the assets of the trust for the benefit of the beneficiaries only, and not their own.

TRUST DEED

A Trust deed is a written document outlining the terms and conditions of the Trust. It specifies who the beneficiaries are, their powers and benefits, the duties and responsibilities of the Trustees, and also how the funds of the Trust should be utilised or managed. This is crucial for legally establishing the Trust and providing clear guidelines for its operation from the get-go.

LEGAL AND BENEFICIAL

The Trust holds the legal title to the assets, while Beneficiaries hold the beneficial title, thereby enjoying the benefits of the Trust’s assets. This essentially means that there is a separation between ownership and benefits, and this is fundamental to the Trust structure because it ensures that the assets are managed effectively for the Beneficiaries.

Our experts

Recognising the diversity of our clients' needs, we understand that for more nuanced circumstances, a trust can be an invaluable tool and a strategic move. Adept in crafting bespoke trust solutions for more complex financial situations, our professionals are committed to designing unique trust structures that align seamlessly with your long-term goals. You can trust us to build a robust foundation for your future.

The Benefits of Creating a Trust

A Private Trust (or Family Trust) is an advanced estate planning tool that provides significant advantages, ensuring seamless asset management, enhanced privacy, and the ability to protect and provide for your loved ones in a structured manner. Some benefits include:

  • Protection: A Trust can help safeguard assets from creditors, lawsuits, and other legal claims. It can also protect from inheritance tax or estate taxes, if applicable in your jurisdiction.
  • Preserve: A Trust can avoid probate formalities and ensure that your assets pass seamlessly to your beneficiaries without delay, even in unanticipated circumstances.
  • Provide: A Trust can provide financial security for your family members, care for minors or dependents, and for those with special needs.
  • Prevent: Creating a Trust can help prevent disputes and delays for family members by providing a clear structure that is difficult to challenge in court.

What are the Types of Trusts?

There are various types of Private Trusts, each designed to serve specific purposes:

  • ‍Revocable Trust: Allows the Settlor to retain control over the assets during their lifetime and modify the Trust deed as needed.
  • ‍Irrevocable Trust: Once established, the Trust deed cannot be altered without the consent of all Beneficiaries. This type offers potential estate tax benefits and enhanced asset protection.

Revocable and irrevocable Trusts can further be classified into determinate and discretionary Trusts. In a Determinate Trust, the Beneficiary's share is specified. In contrast, a Discretionary Trust doesn't have a fixed Beneficiary share; instead, the Trustee or Settlor, as the case may be, determines the benefits given to the Beneficiary.

How do I set up a Trust with IndiaFilings?

We offer professional advice and personalised Trust solutions that cater to your unique financial goals.

Step 1: Expert Consultation

Our initial step involves a comprehensive consultation with our seasoned legal experts. With their combined experience of over 50 years in creating Trusts for families in India and abroad, we will delve into your unique circumstances.  This helps us better understand your aspirations and objectives, paving the way for a personalised Trust strategy. 

Step 2: Structure & Trust Deed

Our experts will work closely with you to conceptualise a tailored structure that aligns perfectly with your needs (revocable Trust, irrevocable Trust, discretionary Trust, determinate Trust etc.). We then translate this into a meticulously drafted Private Trust Deed, capturing your specific wishes and intentions.

Step 3: Registration & Asset Transition

Our team takes charge of the entire registration process, ensuring your Trust's compliance with Indian legal requirements. As a final step, we provide expert assistance in transferring assets to the Trust, considering potential tax implications and ensuring a seamless transition that safeguards your financial interests.

Expert 1

Consult Experts

Related Guides

Frequently asked questions

Common questions about Create a Family Trust.

While often used interchangeably, a Will and a Private / Family Trust are two very different tools used for estate planning. Simply put, a Will outlines your wishes for the distribution of your assets after your passing, while a Trust takes effect immediately, in your lifetime, and allows you to house assets within a secure entity, managed by a trustee on behalf of your beneficiaries. A Trust can provide more control over the distribution of income from assets, timing and conditions of asset sale, in addition to key benefits like consolidation of assets, seamless transmission, incapacitation planning, minimising estate taxes, and avoiding probate.
In the case of a Revocable Trust, you can make changes at any time during your lifetime, as long as you are mentally competent to do so, and the Trust deed allows it. You can amend the Trust document or create a new one entirely, providing flexibility in adapting your estate plan to changing circumstances. An Irrevocable Family Trust deed will require consent of all Beneficiaries prior to changes.
Yes, it is advisable to have a Will even if you have a Trust. A Will helps plan for assets that were not transferred to the Trust, those unintentionally left out of the Trust or for naming guardians for minor children. It can also act as a “pour-over Will” to transfer any assets into the Trust that were not previously included. In India, transferring immovable property to a Trust via a Will also helps to avoid stamp duty.
You can transfer many types of assets, from your life insurance policy to movable and immovable property, financial investments, deposits, mutual funds, and more.
A Family Trust, also known as a Private Trust, is a legal entity created to hold and manage assets for the benefit of specified beneficiaries, such as family members.
A Family Trust provides long-term wealth protection, tax efficiency, smooth inheritance planning, and helps prevent disputes among family members.
A Revocable Trust allows the Settlor to retain control and modify the Trust during their lifetime, whereas an Irrevocable Trust cannot be altered without the consent of all beneficiaries, offering enhanced asset protection.
The Settlor creates the Trust, the Trustee manages the Trust assets on behalf of the Beneficiaries, who receive the benefits as specified in the Trust Deed.
A Trust Deed is a legal document that outlines the terms, conditions, and objectives of the Trust, including roles, responsibilities, and beneficiary entitlements.
Yes. Properly structured Trusts can safeguard assets from legal claims, creditors, and potential inheritance disputes.