Why Do You Need A Charitable Trust Deed?When a charitable trust is formed, it requires the execution of a trust deed. A charitable trust deed is virtually the constitution of the Trust. The trust is duty bound to follow the terms and conditions laid down in the charitable trust deed. A deed also gives a legal entity to the trust. In fact, a trust deed legalises the trust and is one of the pre-conditions for a trust to operate lawfully pursuing its goal. Trust deeds follow a specific format. The deed mentions the date on which the document has been executed, and it also mentions the name of the donor (s) who is giving the asset to the trust. The deed covers the executors, administrators, and representatives of the donor, unless it is specifically otherwise mentioned. All such persons who are named in the trust are jointly referred to as trustees. It will also include their successors in office. The deed expresses the willingness of the settler or donor to establish a trust having public charitable objects. The trustees also express in writing their willingness to act as trustees and execute the deed in presence of witnesses. Thereafter, the deed mentions about the objects, financial clauses, the method of running the trust, the regulations governing its activities, and the powers of the trustees. It also provides the provisions, agreements, and declarations in respect of the trust. There is one particular information that is a vital part of the charitable trust deed is the address and location of its office. Without such information no trust can be registered. It also contains the name and address of all the trustees. Thereafter, the document should consist of a brief, to the point, narration of the aims and objectives of the trust. The objectives generally are public welfare, providing support to welfare organisations, and public utility agencies, such as, hospitals and health institutions, educational institutions, running scholarships and awards, providing aids to institutions, helping improvement of public places, like parks, bus stands etc, supporting the vulnerable sector of the society, and many more. All the above information is followed by a general overview of the process of acquisition, management, and utilisation of financial aspects of the charitable trust. These matters are mentioned in the financial balance sheet audited by Chartered Accountants. The trust fund may be augmented by the income from its initial funds, and you may also invite donations and other contributions from time to time. There is also a commitment that the trust fund shall not be utilised for any purpose other than those mentioned in the deed. However there could be a few acceptable changes. The trust would have the right to accept any donation contribution, grant of subscription, and have the power to apply the whole or part of the funds collected in a charity or to a beneficiary. The trust could also convert and deal with the trust property, and invest the trust fund in a proper manner. The trustees can regulate and exercise these powers properly and peacefully. Once the legal requirements of the charitable trust deed are accepted, the trust gets the power to achieve the coveted objectives. Similarly, a trust can also be dissolved at any time by consent of the trustees or otherwise among the different parties in the Trust. |