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What are the rights of a beneficiary under a trust?

What are the rights of a beneficiary under a trust?

06-Jan-2026

Wills & Trusts

Answer By law4u team

A trust is a legal arrangement where the settlor transfers ownership of assets to a trustee, who manages and administers these assets for the benefit of the beneficiary. In India, trusts are governed by the Indian Trusts Act, 1882 and other related laws, depending on the type of trust (e.g., private trusts, public trusts, charitable trusts). A beneficiary is the person for whose benefit the trust is created, and they have certain rights under the law. These rights ensure that the beneficiary receives the intended benefits from the trust, and they are safeguarded by the terms of the trust deed as well as applicable legal provisions. In this article, we will explore the various rights that a beneficiary has under a trust in India. 1. Right to Receive Benefits (Entitlement) One of the most fundamental rights of a beneficiary is the right to receive the benefits specified in the trust deed. This could involve: Income from the trust property: For example, if the trust holds assets like shares, real estate, or bank accounts, the beneficiary is entitled to receive a share of the income generated from those assets (e.g., dividends, rent, or interest). Distribution of principal or corpus: In some cases, the trust deed may specify that the beneficiary will receive the trust’s principal amount (also known as the corpus) at a certain time, such as after the death of the settlor or at a specified age or event. Specific Benefits: If the trust provides benefits such as educational, healthcare, or support for living expenses, the beneficiary has the right to receive these benefits as prescribed by the trust. 2. Right to Information A beneficiary has the right to obtain information about the trust’s management and operations. This includes: Right to ask for accounts: The beneficiary can request a detailed statement of accounts, including how the trust property is being managed, income generated, expenses incurred, and distributions made. Right to request details of trust property: A beneficiary can ask for information about the nature and value of the trust property, the assets held by the trust, and any changes made to the trust’s portfolio. The trustee is legally obligated to provide this information to the beneficiary, ensuring transparency and accountability in the trust's management. 3. Right to Ensure Proper Administration of the Trust Beneficiaries have the right to expect that the trust will be administered in accordance with the terms set forth in the trust deed and the laws governing trusts. This includes: Duty of care: The trustee has a legal duty to manage the trust property with due care, in the best interest of the beneficiaries. Right to hold trustee accountable: If the beneficiary believes the trustee is not acting in their best interests, they have the right to challenge the trustee's actions in court. This could involve the trustee’s failure to perform their duties, breach of trust, or mismanagement of trust assets. Right to seek removal or replacement of trustee: If the beneficiary believes the trustee is not fulfilling their responsibilities, they can seek the removal of the trustee through a court order. 4. Right to Receive Distributions as Per Trust Deed A beneficiary has the right to receive distributions (in money or property) from the trust according to the terms and conditions outlined in the trust deed. These distributions may be: Regular income payments (e.g., interest or dividends) Periodic lump sum payments (e.g., every year or every few years) One-time distributions (e.g., upon the beneficiary reaching a certain age or upon a specific event happening) If the trustee fails to make the required distribution, the beneficiary can demand the same and, if necessary, seek enforcement through legal channels. 5. Right to Challenge the Trust Under certain circumstances, a beneficiary has the right to challenge the trust. For example: For undue influence or fraud: If a beneficiary believes that the trust was created under undue influence, coercion, or fraud, they may have the right to challenge the validity of the trust in court. If the trust terms are not clear or are ambiguous: If the beneficiary believes that the trust deed contains provisions that are unclear or ambiguous, they can seek judicial interpretation of the trust terms from a court. On grounds of illegality or public policy: If the trust is created for an illegal purpose or if its terms violate public policy, a beneficiary may challenge the trust on those grounds. 6. Right to be Treated Fairly and Equally In a discretionary trust, where the trustee has discretion over how benefits are distributed among beneficiaries, the beneficiary has the right to expect fair and equal treatment under the terms of the trust. This means: The trustee must exercise their discretion reasonably and not arbitrarily. The trustee must take into account the needs, rights, and entitlements of all the beneficiaries when making distributions. If a beneficiary feels that they have been treated unfairly, they can seek legal recourse to ensure that their rights are respected. 7. Right to Apply for Variation of Trust In certain situations, a beneficiary may seek the modification or variation of the trust terms. This can be done under Section 51 of the Indian Trusts Act, 1882, which allows the court to vary the terms of the trust in certain circumstances, such as: When the trust becomes impossible to fulfill: If it becomes difficult or impossible to fulfill the terms of the trust, the court may modify the trust to better suit the original intentions of the settlor and the needs of the beneficiaries. When circumstances change: If there has been a significant change in circumstances (for example, changes in the financial situation of the beneficiaries or changes in the law), the beneficiaries can apply to the court for a change in the trust's terms. 8. Right to Residuary Benefits In cases where a trust provides specific benefits to certain beneficiaries and residual benefits to others, the right to residuary benefits becomes important. A residuary beneficiary is one who is entitled to the remaining assets of the trust after all other specified distributions have been made. This could involve: Distribution of remaining corpus: Once all primary beneficiaries have received their share, any remaining assets (the residuary corpus) may be distributed to the residuary beneficiaries. Right to challenge unequal distribution: If the residuary distribution seems unfair or violates the trust’s terms, the beneficiary can contest it in court. 9. Right to Income from Trust Assets Where the trust is established to generate income, such as a trust holding shares or other investments, the beneficiary is generally entitled to receive a share of the income generated from the assets, like dividends, interest, or rental income. Trustee’s duty to ensure income is generated and distributed: The trustee is expected to ensure that the trust assets are managed efficiently to generate income for the beneficiaries, according to the provisions of the trust deed. Right to sue for non-payment: If the trustee fails to pay the income due to the beneficiary, the beneficiary can take legal action to recover the income. 10. Right to Terminate the Trust Under certain conditions, the beneficiary may have the right to terminate the trust or demand that the trust be wound up, particularly if: The purpose of the trust has been fulfilled: For example, if the trust was created for a specific purpose, and that purpose is now completed, the beneficiary may seek the termination of the trust. When the trust is no longer sustainable: If the trust assets are exhausted or if the trust has become impractical or unfeasible to continue, the beneficiary may apply for the termination of the trust. Conclusion The rights of a beneficiary under a trust are designed to protect their entitlements, ensure transparency in the management of the trust, and provide mechanisms for accountability and fairness. While beneficiaries have the right to receive benefits, information, and distributions as stipulated in the trust deed, they also have the ability to challenge improper actions by the trustee and, in some cases, seek judicial intervention. Understanding these rights is essential for both beneficiaries and trustees to ensure that the trust operates effectively and in accordance with the law. For beneficiaries, these rights provide the means to protect their interests and ensure they receive the intended benefits of the trust. For trustees, these rights impose a duty to manage the trust in good faith, with due care and diligence.

Answer By Anik

Dear client, As per your query, a trustee is someone who can be an individual or an entity legally appointed to hold and manage the assets or property (like money, real estate, or investments) for the benefit of a third party, who is the beneficiary, set according to the rules of the trust's creator (grantor/settlor). Right to Income and Trust Property A beneficiary has the right to receive the income, rents, profits, or other such distributions from the trust property which is strictly in accordance with the terms of the trust deed. This is the right that becomes enforceable once the conditions prescribed in the trust instrument are fulfilled. The trustee however, cannot arbitrarily withhold or divert such income, and any misuse or misapplication may amount to the breach of trust. Right to Information and Inspection A beneficiary is entitled to inspect the trust instrument, books of accounts, vouchers, and other such relevant documents to understand as to how the trust is being administered. This is the right which ensures the transparency and accountability on the part of the trustee and enables the beneficiary to verify if, whether the trust property is being managed prudently and lawfully or not. Right to Enforcement of the Trust A beneficiary also has the right to approach the court and to compel the trustee to perform their duties in accordance with the trust deed and the law. Where there is an apprehension of misuse, as well as mismanagement, or breach of trust, the beneficiary may seek some apreventive relief such as an injunction to restrain the trustee from committing a contemplated breach. Right to Proper Trustees and Removal A beneficiary can also demand that the trust property be administered by such competent, honest, and responsible trustees. If a trustee acts for instance, dishonestly, negligently, or in conflict with the interests of the trust, the beneficiary also has the right to seek their removal and replacement through the court to safeguard the trust property. Right to Follow Trust Property A beneficiary has the right to trace and claim the trust property even if it has been wrongfully mixed with the trustee’s personal assets or converted into any other form. This equitable right ensures that the trustees cannot escape such liability by altering the form of trust property, and the beneficiary can assert their claim over the identifiable proceeds of such property. I hope this answer was helpful. For further queries, please do not hesitate to contact us. Thank you.

Answer By Ayantika Mondal

Dear client, Trust in India is specifically governed by Indian Trust Act, 1882. Under this Act, Section 55 to 69 states the rights and liabilities of the beneficiary. A beneficiary (cestui que trust) is the person for whose benefit the trust is created and is vested with several statutory rights to ensure proper administration of the trust. Therefore the rights of beneficiary from Section 55 to 61 of the Act, 1882 is explained below: Section 55 – Rights of beneficiary: A beneficiary has the right to the rents and profits of the trust property and to have the trust duly executed and administered according to its terms. The beneficiary is also entitled to inspect and take copies of the trust instrument, accounts, and documents relating to the trust property, and to compel the trustee to perform his duties and to seek remedies for any breach of trust. Section 56 – Right to specific execution: The beneficiary has the right to require the trustee to specifically execute the trust, except where such execution is not specifically enforceable under law. Section 57 – Right to transfer beneficial interest: The beneficiary is entitled to transfer or dispose of his beneficial interest, subject to the terms of the trust and the provisions of applicable law. Section 58 – Right to sue for execution of trust: A beneficiary may institute a suit against the trustee for the execution of the trust, enforcement of rights, or for relief in case of breach of trust. Section 59 – Right to proper trustees: The beneficiary has the right to ensure that the trust is administered by a competent and proper trustee, and may seek the removal or appointment of a trustee in accordance with law where necessary. Section 60 – Right to compel trustee to act impartially: Where there are multiple beneficiaries, each beneficiary has the right to compel the trustee to deal impartially with all beneficiaries and to act fairly in the administration of the trust. Section 61 – Right to prevent breach of trust: The beneficiary has the right to restrain the trustee from committing any threatened or contemplated breach of trust and may seek appropriate relief from the court to protect the trust property. I hope this answer was helpful. For further queries, please do not hesitate to contact us. Thank you.