Settlor, Trustee, Beneficiary, Protector in Private Trust

  1. The person who transfers/settles his asset is called “Settlor”. He is one who reposes or declares confidence, and is commonly referred as “Author of Trust”
  2. The Person who manages the asset on behalf of the other is a called “Trustee”. Trustee is the legal owner of the Asset. However he does not have right to enjoy the benefits of asset settled in trust. Trustee can be Individual or Corporate
  3. The Person on whose behalf asset is held is called Beneficial Owner or the “Beneficiary”. He has the right to enjoy the benefits of the asset
  4. 4. “Protector” is one who monitors the acts of Trustee. It is the additional layer of protection offered to Beneficiary to avoid any mishandling of asset of trust. Trustee requires his consent for certain/all his acts with respect to Trust

Typical Basic Private Trust Structure

Types of Private Trusts

  1. Irrevocable Trust: Asset settled cannot be transferred/ revoked by settlor and come to an end once the purpose is fulfilled. Tenure  of such trust ends on completion of specified period in Trust or fulfillment of purpose for which trust if formed
  2. Revocable Trust: A trust that can be revoked at any time during the life time of settlor. In this kind of Trust, Settlor has right to reclaim the assets
  3. Determinate/Specific Trust: Beneficiary is identified and their share of benefit is also determined. In case of one beneficiary, it will automatically fall under definition of Determinate Trust

  4. Discretionary Trust: Beneficiary or their share remains unidentified. Trustee at his discretion decide the beneficiary and quantum of assets to be distributed to them

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