{"id":5664,"date":"2026-03-10T08:01:01","date_gmt":"2026-03-10T08:01:01","guid":{"rendered":"https:\/\/nrilegalworld.com\/?p=5664"},"modified":"2026-03-10T08:02:10","modified_gmt":"2026-03-10T08:02:10","slug":"setting-up-family-trust-for-nris-in-india","status":"publish","type":"post","link":"http:\/\/112.196.38.115:4294\/mycaremedical\/blog\/setting-up-family-trust-for-nris-in-india\/","title":{"rendered":"Setting up Family trust for NRIs in India"},"content":{"rendered":"\n

Setting up Family trust for NRIs in India<\/h2>\n\n\n\n
\"The<\/figure>\n\n\n\n

A family trust in India is a legal structure where a person transfers assets (like property, money or investments situated in India) into a trust and which is handled by a professional person who manages the assets of the person(settlor) for the benefit of the family members. A family trust is commonly used by NRIs to protect Indian assets and avoid legal problems in India. A family trust is a legal system to hold and manage family wealth safely for present and future generations.<\/p>\n\n\n\n

The family trust can be created under the Indian trust act 1882 and is legally valid for NRIs<\/p>\n\n\n\n

Parties in a Family Trust<\/strong><\/p>\n\n\n\n

A Family trust has three main roles:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
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  1. Settlor:<\/strong><\/li>\n<\/ol>\n\n\n\n

     The NRI who creates the trust and transfers his own assets (like property, Money, Bank deposits, any other income, etc.) into the family trust.<\/p>\n\n\n\n

    The settlor is also the creator of the trust. The settlor creates the trust to protect Indian assets and avoid legal problems in India. The settlor  has the power to change or cancel the family trust anytime.<\/p>\n\n\n\n

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    1. Trustee<\/strong>:<\/li>\n<\/ol>\n\n\n\n

      The person who manages the trust assets is a trustee. The trustee is also called the manager of the trust. The trustee must strictly follow the rules of the trust, these rules are formed by the settlor while creating a family trust. The trustee works for the settlor and the nominated beneficiaries of the family trust. The trustee manages property or income and distributes benefits among the beneficiaries of the family trust according to the trust rules.<\/p>\n\n\n\n

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      1. Beneficiaries:<\/strong><\/li>\n<\/ol>\n\n\n\n

        The beneficiaries are the persons who benefit from the family trust. The Beneficiaries can be the spouse, children, parents or future generations of the settlor (creator) of the Family trust.<\/p>\n\n\n\n

        These are the three main parties of the family trust, which are necessary to create a family trust.<\/p>\n\n\n\n

        Types of family trusts commonly used by NRIs:<\/strong><\/p>\n\n\n\n

        \"Types<\/figure>\n\n\n\n
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        1. Revocable trust<\/strong>: A revocable trust is a type of family trust that can be changed, modified or cancelled anytime by the person (Settlor) who created it <\/li>\n\n\n\n
        2. Irrevocable trust<\/strong>: An irrevocable trust is a type of family trust that cannot be easily changed or cancelled once it is created and assets are transferred into it. The irrevocable trust is usually permanent and used for long-term protection and planning.<\/li>\n\n\n\n
        3. Private family trust:<\/strong> A private family trust is a legal arrangement created to manage and protect assets only for specific family members, not for the public or charity.<\/li>\n<\/ol>\n\n\n\n

          Procedure to create family trust in India:<\/strong><\/p>\n\n\n\n

          \"\"<\/figure>\n\n\n\n

          Here is the step by step guide to create a family trust in India for Indian assets: <\/p>\n\n\n\n

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          1. Decide assets to be included in a family trust<\/li>\n\n\n\n
          2. Choose a reliable trustee to run the trust, he\/she can be either from the family or someone outside the family.<\/li>\n\n\n\n
          3. Decide the beneficiaries of the family trust.<\/li>\n\n\n\n
          4. Draft a clear trust deed with a clear set of rules to govern the trust. <\/li>\n\n\n\n
          5. Register the trust deed in India<\/li>\n\n\n\n
          6. Obtain a PAN for the trust and open a bank account for the Family trust. <\/li>\n<\/ol>\n\n\n\n

            Why should NRIs create a Family trust in India?<\/strong><\/p>\n\n\n\n

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            1. Protection of property in India:<\/li>\n<\/ol>\n\n\n\n
              \"family<\/figure>\n\n\n\n

              As NRIs are living abroad and cannot personally manage property, they need a family trust to manage it.<\/p>\n\n\n\n

              A trust helps in:<\/p>\n\n\n\n