A trust is created where the absolute owner of the property (the settlor) passes the legal title in that property to a person (the trustee) to hold that property on trust for the benefit of another person (the beneficiary) in accordance with the terms set out by the settler. Trust performs the task of enabling more than one person to have rights in the same property simultaneously. There are two kinds of trusts – ‘express trusts’ and ‘trusts implied by law’. Express trusts are those which are created deliberately by ordinary people. Trusts implied by law are those which are created by the court to prevent unconscionable behavior. Before the trust is created, the settlor retains the absolute title in the property which is to be settled on trust. The settlor ceases to have any active function in the trust when a trust has been validly declared. Upon creation of a trust, the legal title in the trust property must be legally vested in the trustee and held by the trustees for the beneficiaries on trust. In case of any litigation between the trust and third persons, it is conducted by the trustee as legal title holder in the trust property. The most vital feature of the trust is that the trustee is not entitled to declare or affirm personal and beneficial ownership in the trust property. On the contrary, all of the beneficial title in the property vests in the beneficiary. Bare Trust, Fixed Trust, Discretionary Trust and Accumulation and Maintenance Trust are some of the kinds of trusts based on its purpose.
