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TRUSTS | CAIIB JUNE STUDY MATERIAL 2023

CAIIB JUNE SHORTS NOTES 2023

This article discusses Trusts and CAIIB JUNE study material 2023. 

CAIIB exam is held by IIBF twice every year. CAIIB exam JUNE 2023 is approaching soon, and we are here to help you with that through our CAIIB study material in JUNE 2023 that our experts have compiled. We will talk about this CAIIB study material JUNE 2023 later in this article, and before that, we will discuss one of the essential topics of the CAIIB June exam 2023, which is Trust.

TRUST

A trust is described as “a duty attached to the ownership of property and arising out of a confidence reposed in and accepted by the owner or declared and acknowledged by him, for the benefit of another and the owner” under section 3 of the Indian Trust Act, 1882. Simply put, it is the transfer of property from one person (the settlor) to another (the trustee), who then manages it for the benefit of another (beneficiary). The assets must be legally transferred from the settlor to the trust’s trustee.

WHO IS ELIGIBLE TO FORM A TRUST? 

Any competent person, who is over 18 and mentally sound, may establish a trust for any purpose permitted by law (s). The age of majority is 21. A company, firm, society, or group of people can establish trust in addition to an individual being.

MEMBERS OF THE TRUST

  1. The person or entity establishing a trust is the settlor—also referred to as a grantor or trustee. 
  2. Trustee – An owner who has a duty to use their property for the benefit of others. 
  3. Beneficiary – The owner who benefits from a trust’s assets.

Read Also: IIBF CAIIB EXAM JUNE DATE 2023: NOTIFICATION & SYLLABUS

THE ESSENTIALS OF A TRUST

  1. A written trust deed ratified by the settlor, a minimum of two trustees, and two witnesses.
  2. Trust-owned assets (Money or Other Property).
  3. Trust’s objective or purpose.
  4. Stamp Paper based on the value of the trust-owned property
  5. Sub-office Registrar’s registration of the deed. Payment of registration fees for apartments.
  6. Trust Name
  7. Address of Trust 
  8. Open a bank account for the trust and apply for a permanent account number.

TYPES OF TRUSTS IN INDIA

In India, there are two different kinds of trusts: private trusts and public trusts. Public trusts are split into benevolent and religious trusts, while private trusts are governed by the Indian Trusts Act of 1882. Some statutes regulating the enforcement of public trusts in India include the Charitable and Religious Trust Act, 1920, the Religious Endowments Act, 1863, the Charitable Endowments Act, 1890, and the Bombay Public Trust Act, 1950. In recent years, trusts have also been employed as investment vehicles like mutual and venture capital funds. The Securities and Exchange Board of India is in charge of regulating these trusts (SEBI).

Some of the types of trusts are described below

PRIVATE TRUSTS

The 1882 Indian Trusts Act governs private trusts. All of India is covered by this Act, except for the Andaman and Nicobar Islands and the State of Jammu & Kashmir. Waqf, Hindu Undivided Family Property, Charitable Endowments, and Trusts to share wartime spoils among prisoners are not covered by the Indian Trusts Act of 1882. A trustee may be chosen from among those who are competent to hold property. A minor may be appointed as trustee if the trustee must take on a passive position with no room for discretion, depending on the nature of the trust. As a trustee, you can appoint a corporation, business, or group of people.

REVOCABLE TRUSTS

Revocable trusts can be completely cancelled or changed throughout the lifetime of the trust-maker and are created during that time. These trusts, frequently referred to as living trusts, are those in which the trust-maker transfers ownership of a property to a trust, acts as the original trustee, and has the power to remove the property from the trust while still alive. Trusts that are revocable are beneficial for avoiding probate. Assets won’t be subject to probate if ownership is transferred to a revocable trust while the trust-maker is still alive such that it is owned by the trust at the time of the trust-maker’s passing.

IRREVOCABLE TRUSTS

An irrevocable trust is one that, once established, cannot be changed, amended, modified, or revoked. Once a piece of property is placed in an irrevocable trust, nobody—not even the person who created the trust—can remove it. An irrevocable trust may hold the benefits of survivorship life insurance, which is a possibility. However, survivorship life insurance held in an irrevocable trust can have very negative effects. This type of life insurance can be used for estate tax planning purposes in large estates.

ASSET PROTECTION TRUST

A sort of trust called an asset protection trust is intended to shield a person’s assets from potential creditor claims. Although the assets may not always need to be moved to the foreign jurisdiction, these trusts are frequently established outside of the United States. An asset protection trust’s main goal is to shield assets from creditors. These trusts are typically set up so that the trustmaker is not the current beneficiary and that they are irrevocable for a period of years.

SPECIAL NEEDS TRUST

A special needs trust is created for a person who gets government assistance in order to prevent the beneficiary from losing access to those benefits. This is fully lawful and allowed by Social Security regulations as long as the disabled beneficiary is unable to decide how much or how often trust payouts occur or to revoke the trust. Normally, receiving an inheritance or a gift could make someone who is currently receiving government benefits less or completely ineligible for such uses.

Now that we are done with various aspects of trust and its types, we would like to move on to the CAIIB study material June 2023

Read Also: CAIIB IT IMPORTANT CASE STUDIES

CAIIB JUNE STUDY MATERIAL 2023

Our CAIIB study material June 2023 includes the following services: 

  • Recorded video lectures, which can be downloaded
  • Live sessions and YouTube classes are also available.
  • Short and easy notes in the form of ePDFs are complementary along with our lectures which can be accessed on our apps. 
  • CAIIB mock tests 2023 are also available for you to practice. 
  • Case studies are also included in our CAIIB study material in June 2023.

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