Sections 9-10 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 9 says who may be a beneficiary and how a beneficiary may refuse a benefit. Section 10 says who may be a trustee, that no one is bound to accept a trust, how acceptance happens and how an intended trustee can disclaim. Together they decide who sits on each side of a trust before it starts working. If you are choosing trustees for a family trust, a legal consultation can help you test the choice against these sections.
Every person capable of holding property may be a beneficiary (s.9) and may be a trustee (s.10). But where the trust involves the exercise of discretion, the trustee cannot execute it unless he is competent to contract. No one is bound to accept a trust. A trust is accepted by words or acts showing acceptance with reasonable certainty, or the intended trustee may disclaim within a reasonable period, which stops the property vesting in him.
Section 9: who may be a beneficiary
Section 9 reads: "Every person capable of holding property may be a beneficiary." It then adds a rule on refusal, headed "Disclaimer by beneficiary": "A proposed beneficiary may renounce his interest under the trust by disclaimer addressed to the trustee, or by setting up, with notice of the trust, a claim inconsistent therewith."
So there are two ways for a proposed beneficiary to renounce: a disclaimer addressed to the trustee, or setting up, with notice of the trust, a claim inconsistent with it. The section does not say a disclaimer must be in a particular form. It does say it is "addressed to the trustee".
Section 10: who may be a trustee
Section 10 reads: "Every person capable of holding property may be a trustee; but, where the trust involves the exercise of discretion, he cannot execute it unless he is competent to contract."
The same test applies to trustees as to beneficiaries (capable of holding property), with one added condition: where discretion is involved, the trustee must be competent to contract. A minor, for instance, may be capable of holding property but cannot exercise a discretionary trust under this rule, since a minor is not competent to contract.
The Act deals with private trusts; public, charitable and religious trusts are governed by other laws, as in private trust vs public trust.
Acceptance and disclaimer by a trustee
Section 10 goes on in four short paragraphs:
| Heading in the text | What it says |
|---|---|
| No one bound to accept trust | "No one is bound to accept a trust." |
| Acceptance of trust | A trust "is accepted by any words or acts of the trustee indicating with reasonable certainty such acceptance." |
| Disclaimer of trust | Instead of accepting, the intended trustee may, "within a reasonable period, disclaim it and such disclaimer shall prevent the trust-property from vesting in him." |
| Disclaimer by one of several | A disclaimer by one of two or more co-trustees "vests the trust-property in the other or others, and makes him or them sole trustee or trustees from the date of the creation of the trust." |
Three points of reading:
- Acceptance can be by conduct. The section says "words or acts". A trustee need not sign a separate acceptance, though a written acceptance removes doubt.
- Disclaimer has a time frame. The text says "within a reasonable period" and does not give a number of days. The reasonable period is a question of facts.
- Co-trustee disclaimer. If one co-trustee disclaims, the remaining trustees are treated as sole trustees "from the date of the creation of the trust", not from the date of disclaimer.
The Act's own illustrations (section 10)
The source prints three illustrations under section 10 (the OCR labels all three "(a)"). In plain words:
- A leaves property by will to B and C, his executors, as trustees for D. B and C prove A's will. That is in itself an acceptance of the trust; B and C hold the property in trust for D.
- A transfers property to B in trust to sell it and pay A's debts from the proceeds. B accepts the trust and sells the property. So far as B is concerned, a trust of the proceeds is created for A's creditors.
- A leaves a lakh of rupees to B upon certain trusts and appoints him his executor. B separates the lakh from the general assets and appropriates it to the specific purpose. This is an acceptance of the trust.
Each shows acceptance by conduct, which matches the "words or acts" wording of the section.
A modern example of our own
Deepak Jain creates a family trust for his granddaughter's education and names two trustees, his friend Manoj and his accountant Pooja. Manoj is a retired teacher living abroad and does not wish to act. He writes to Deepak declining, soon after being told. Under section 10, a disclaimer within a reasonable period prevents the trust-property from vesting in him, and because Pooja is the other co-trustee, the property vests in her and she is sole trustee from the date the trust was created.
On the beneficiary side, Deepak's nephew Ishaan, named as a secondary beneficiary, does not want the benefit. Under section 9 he may renounce by a disclaimer addressed to the trustee.
What the instrument of trust can change
Neither section says "subject to the instrument of trust". The rules on capacity, acceptance and disclaimer are in the Act itself. A deed can still name alternate trustees, and say who acts if a named trustee disclaims, as a matter of drafting.
Practical points
- Settlors: ask each person whether they will act as trustee before naming them, and record the answer.
- Trustees: if you do not wish to act, disclaim in writing promptly and do not act on trust matters meanwhile, since acts can show acceptance.
- Beneficiaries: a disclaimer should be addressed to the trustee; keep a copy.
- Discretionary trusts: do not appoint a trustee who is not competent to contract, such as a minor, where discretion is to be exercised.
Need help choosing and appointing trustees?
Choosing trustees well, and recording acceptance or disclaimer, avoids gaps in a family trust. Our legal consultation team can review your proposed trustees and the clauses on acceptance. Bring the draft deed and the names you have in mind.
Key takeaways
- Every person capable of holding property may be a beneficiary (s.9) or a trustee (s.10).
- A trustee exercising discretion must be competent to contract.
- A proposed beneficiary may renounce by a disclaimer addressed to the trustee or by setting up, with notice of the trust, an inconsistent claim.
- No one is bound to accept a trust; acceptance can be shown by words or acts.
- A timely disclaimer stops the property vesting in the intended trustee; if one of several co-trustees disclaims, the others become sole trustees from the date of creation.
Read next
- Section 11: trustee to execute the trust
- Section 7: who may create a trust
- Duties of trustees under the Trusts Act
- Appointment of a new trustee: resolution and deed
Disclaimer: Based on the text of the Indian Trusts Act, 1882 as consulted on 1 October 2026 from a scanned copy; the Act applies to private trusts, and public, charitable and religious trusts are governed by other laws. This article is general information, not legal advice; check the official text and take advice before acting.