The biggest contribution of equity to the world is ‘Trust’, under its exclusive jurisdiction the trust is there.
The common law was not in favor of trust while as equity favored trust.
According to Maitland – “Trust is the most significant invention of equity. It is the most powerful experimentation when a person has right which he is bound to exercise on behalf of another he is said to have these rights in trust for the other.
According to Becan – “A trust is the binding of the conscience of one to the intention of the another”
MEANING
In trust we find that the property belongs to someone. He trusts upon the trusty and and asks them to fulfil certain social objects through trust.
The concept of Nobel Prize is based on Trust 50% of the property is managed by the Trustees.
Good causes, hospitals, libraries, humanitarian work are done by Trust.
Trust has 3 ownerships: –
- Actual owner of property who make the trust.
- The trustee who manages the trust.
- The beneficiaries who take the benefits of the trust.
ELEMENT OF TRUST
The primary elements of trust can be summarized as: –
- The trustee has ownership and possession of the trust property, while the property belongs to the other person, who wants that the property be utilized for the benefit and achievement of some noble objects.
- The trustee owns equitable obligation to the beneficiary for whose benefit the trust has been made. Equity will enforce his obligations very strictly.
- The beneficiary/beneficiaries must be clearly and accurately described in the trust once a valid trust is established and recognized the beneficiaries acquire an equitable beneficial interest in that property.
- A trust should necessarily have in its legal interest and equitable interest separated.
It must be shown that the Trustee holds the trust property as owner in a legal capacity for the benefit of a beneficiary who holds the trust property in an equitable capacity.
The trustees and beneficiaries must be separate persons or must exist in separate capacities, otherwise trust cannot exist.
In making a trust the role of the settlor is very important. Settlor is the person who creates the trust.
Certain legal consequences will automatically follow, once a Trust is created.
- Settlor has no further legal rights over the property.
- Settlor has no right to interfere with the trust unless the settlor himself is one of the trustees.
- Trustee is supposed to maintain the trust property accordingly to the objects of the trust.
- Trustee owes fiduciary obligations towards the beneficiaries and must make sure that he abides by their obligations.
- Trust should be utilized for the benefit of a third person called as beneficiary.
Difference Between TRUST and WAQF
In Muslim law, Waqf was created where the concept of trust was used. As a result of the creation of trust, the right of waqf (the creator of the Trust) is extinguished and the ownership is transferred to the Almighty.
The manage of the Waqf is the Mutawalli (Caretaker/Superintendent). He has no right in the property belonging to waqf, so, he is not a trustee in a legal terminology. He holds the property to manage it in the name of Allah.
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