Top Law Firm in Bangladesh
Top Law Firm in Bangladesh
Leading Law Firm in Bangladesh
Leading Law Firm in Dhaka
The concept of trust law is very much at its adolescence in Bangladesh. The use of trusts in most circumstances are very rare. A trust in its core is a legal relationship between parties, in which the legal title to a property is entrusted to a person or legal entity with a fiduciary duty i.e., to hold it as a trustee for the ultimate benefit of the beneficiary. Although there are laws in place such as the Trust Act 1882, the practical implications of the same has been next to nil to say the least.
The idea of trust is getting widely used in the recent years with the introduction of the Labor Acts and Rules which is forcing some of the companies to have Provident, Worker’s Profit Participation Funds, Gratuity Funds etc. which employ the concept of trusts, whereby trustees hold on to the funds deposited by or collected from both parties and reserved for future purposes or invested under the purview of the laws.
Use of trusts with regards to family matters are seen in some instances where by the estates are held in trust by the family members for children in the family. In certain aspects, it has been seen that when the successors of the estate of a deceased person is underage, their guardians tend to hold the property in trust, so that they can return the same to the proper successors when they come of age. Also, sometimes the trustees ensure that the necessary payments required for the beneficiary’s education or daily expenses are carried out from the trust fund itself.
A previously common form of trust, which is actually rare now a days, is the establishment of waqf estate. This was a form of charitable trust which was formed by rich Muslims previously, where they donated most of their land to set up educational institutions or mosques. The law with regards to this is the Waqf Ordinance, 1962. The waqf is registered with the government and the trustees accordingly hold it in trust, whereby the particular amount is used for the benefit of the beneficiary.
The Trust Act 1882 has defined in details the ways in which trusts can be formed and the ways in which trusts will be operated. So, who may create a trust? As per the law, A trust may be created by every person who is competent enough to be a party to the contract, and with the permission of a principal Civil Court of original jurisdiction, by or on behalf of a minor. However, it will take into consideration the laws that will be in force at the time the trust is created. The trust property must be transferable to the beneficiary and the trustee will not be holding the same only for the beneficial interest of an existing trust. With regards to becoming the beneficiary, anyone who is capable of holding property may become a beneficiary to the trust. A trustee can deny the liability of accepting the trust.
There are certain duties that a trustee must comply to. On acceptance of the trust, the trustee must comply to the conditions that has been set forth by the author of the trust. Trustee should acquaint himself with the trust property as soon as possible and make sure that they follow the best route for the maintenance of the property. Even if there are suits filed against the trust, it is the duty of the trustee to defend the trust against the same. Also, under no circumstances should the trustee create any such situation which will with regards to the trust property act in adverse to the interest of the beneficiary of the trust. Most of all, the trustee would owe a reasonable duty of care to the trust and the beneficiary.
On taking the entire process into consideration, practicing and using the concept of trust laws can actually be beneficiary in a lot of instances. Since, the laws in question are pretty old, they require major overhaul. With new businesses and properties rising more than ever, the law of trust can actually work miracles for the legal scenario in Bangladesh.
Not only is it necessary for the laws to be amended and updates, the public should also be educated on the benefits of creating trust. Bangladesh can follow the footsteps of developed countries such as the UK and USA to develop its trust jurisdictions.