Section 10 of ITA : Section 10: Who May Be Trustee

Explanation using Example

Imagine a scenario where an individual, Mr. Sharma, creates a trust for the purpose of funding the education of his grandchildren. He appoints his friend, Mr. Iyer, who is a retired teacher and holds property, as the trustee to manage and disburse the funds according to the trust's terms.

Mr. Iyer, being capable of holding property and competent to contract, is eligible to become a trustee. However, since no one is obliged to become a trustee, Mr. Iyer has the choice to accept or refuse the role.

If Mr. Iyer decides to take on the responsibility and starts making decisions on how to best utilize the funds for the grandchildren's education, his actions demonstrate his acceptance of the trust.

Conversely, if Mr. Iyer feels that he is not the right person for this responsibility, he can formally communicate his decision to disclaim the trust within a reasonable time, thereby preventing the trust property from vesting in him. If Mr. Sharma had appointed another person alongside Mr. Iyer, the trust property would then vest solely in the co-trustee from the creation of the trust.