Which of the following is NOT a requisite for a valid trust under Section 6? a) The settlor must have the intention to create a trust b) There must be specific trust property c) The trustee must be a legal expert d) The trust purpose must be lawful
Answer: c) The trustee must be a legal expert
Explanation: Section 6 specifies that for a trust to be valid, the settlor must intend to create a trust, there must be trust property, and the purpose must be lawful. There is no requirement for the trustee to be a legal expert.
What is the term used for the person who reposes or declares confidence in a trustee? a) Beneficiary b) Settlor c) Executor d) Administrator
Answer: b) Settlor
Explanation: The person who reposes or declares confidence in a trustee and creates the trust is called the settlor. They transfer the trust property to the trustee for the benefit of the beneficiaries.
Under Section 41, in which situation can a trustee be discharged? a) Only on the completion of the trust purpose b) By resignation accepted by the beneficiaries c) By any lawful means, such as consent or order of the court d) Only after transferring the property to the settlor
Answer: c) By any lawful means, such as consent or order of the court
Explanation: Section 41 provides that a trustee can be discharged through various lawful means, including fulfillment of the trust purpose, consent of beneficiaries, or an order of the court.
What is the role of the court under Section 34 of the Indian Trusts Act, 1882? a) To create a new trust b) To provide direction to trustees in cases of doubt c) To dissolve all invalid trusts d) To appoint new beneficiaries
Answer: b) To provide direction to trustees in cases of doubt
Explanation: Section 34 allows trustees to seek the court’s guidance in cases of doubt concerning the management or execution of the trust, ensuring the proper administration of trust property.
If a trustee commits a breach of trust, which remedy is NOT available to the beneficiary? a) Compelling the trustee to perform their duties b) Claiming damages from the trustee c) Selling the trustee’s personal property without court intervention d) Seeking the court’s intervention to remove the trustee
Answer: c) Selling the trustee’s personal property without court intervention
Explanation: Beneficiaries can compel the trustee to perform their duties, claim damages, or seek the court’s intervention. However, they cannot sell the trustee’s personal property without due process.
Who has the right to inspect and copy the trust accounts? a) Only the settlor b) Only the trustee c) The beneficiaries d) The general public
Answer: c) The beneficiaries
Explanation: Beneficiaries have the right to inspect and copy the trust accounts to ensure transparency and that the trust property is managed according to its purpose.
What is the limitation period for filing a suit against a trustee for breach of trust under the Limitation Act, 1963? a) 3 years from the date of breach b) 6 years from the date of breach c) 12 years from the date of breach d) No limitation period
Answer: c) 12 years from the date of breach
Explanation: As per the Limitation Act, 1963, the limitation period for filing a suit against a trustee for breach of trust is 12 years from the date of breach unless the breach is fraudulent, in which case no limitation applies.
Under Section 35, can a trustee be held liable for acts of co-trustees? a) Always liable for co-trustees’ actions b) Not liable under any circumstances c) Liable if they concur in or facilitate the breach d) Liable only if they are the senior trustee
Answer: c) Liable if they concur in or facilitate the breach
Explanation: A trustee is liable for co-trustees’ actions only if they have consented to, facilitated, or knowingly benefited from the breach of trust.
What is the consequence if a trust deed is silent on the duration of a trust? a) The trust is valid for 25 years b) The trust is presumed to continue indefinitely c) The trust becomes void d) The court sets a fixed duration
Answer: b) The trust is presumed to continue indefinitely
Explanation: If the trust deed does not specify a duration, the trust is presumed to continue indefinitely until its purpose is fulfilled or becomes impossible or unlawful.
When can a trustee exercise the power of sale for trust property? a) Only when permitted by the trust deed or court order b) At their sole discretion c) Only when beneficiaries demand it d) When the trust property decreases in value
Answer: a) Only when permitted by the trust deed or court order
Explanation: A trustee can sell trust property only if explicitly authorized by the trust deed or with the court’s approval, ensuring that the sale aligns with the trust’s objectives.
Under Section 52, what happens when a trust is extinguished? a) The trustee retains the property b) The property reverts to the settlor c) The property is dealt with according to the settlor’s intentions d) The property is distributed equally among trustees
Answer: c) The property is dealt with according to the settlor’s intentions
Explanation: Upon the extinguishment of a trust, the property is to be dealt with according to the terms of the trust deed or the settlor’s intentions as expressed in the trust deed.
Can a trust be created orally under the Indian Trusts Act, 1882? a) No, a written instrument is mandatory b) Yes, for private trusts only c) Yes, if it involves movable property d) No, unless it is registered
Answer: c) Yes, if it involves movable property
Explanation: Under Section 5 of the Indian Trusts Act, a trust can be created orally if it pertains to movable property. For immovable property, a written instrument is mandatory.
What does Section 13 state about the trustee’s position? a) A trustee is the absolute owner of the trust property b) A trustee holds the property for the beneficiaries’ benefit c) A trustee can use trust property for personal needs d) A trustee has no liability towards the beneficiaries
Answer: b) A trustee holds the property for the beneficiaries’ benefit
Explanation: Section 13 establishes that a trustee is a fiduciary holding the trust property for the benefit of the beneficiaries and must manage it as per the terms of the trust.
What happens if the object of a trust is indefinite? a) The trust is void b) The trustee decides the object c) The court directs the purpose d) The trust continues without an object
Answer: a) The trust is void
Explanation: For a trust to be valid, its object must be certain and lawful. If the object is vague or indefinite, the trust becomes void under the Indian Trusts Act, 1882.
