Charitable Trust

Dear Client,

If the trust deed and especially the power of attorney over immovable property are not properly registered, then as a rule the trust cannot effectively enforce any charge/transfer over that immovable property, and in practice only the movable assets that are actually in the trust’s name or under its control can be applied towards the trust objects or any “debt” the settlor owes to the trust.

The earlier gift of the immovable property means that, unless that gift itself is challenged as invalid or fraudulent, the property is no longer the settlor’s asset; so if the trust cannot legally attach it, what will typically happen is that only the movable corpus is dealt with under the trust, and any remaining “debt” of the settlor to the trust would be, in practical terms, unrecoverable unless the trust sues personally and obtains a decree against the settlor and then finds other attachable assets; the trust does not automatically “take away” other movables beyond what is already settled into it.