For a Secure TomorrowBy Damodar Tilak
The National Trust had its inaugural meeting on October 25, 2000. The Trust covers 4 disabilities:
- Cerebral Palsy
- Mental Retardation
- Multiple Disabilities
Until now the focus of my writings was persons with mental retardation and the families they come from. Now, as a member of the Board of Trustees of The National Trust, I have to maintain a broader perspective.
The actions discussed in this booklet would fall into 3 broad categories:
- Accumulation of savings
- Management of savings
- Income tax benefits.
Funds are required for the rehabilitation and life long caring services to be provided to the persons covered by The National Trust.
Total funding by the State or Central Governments does not seem possible for families of middle income group. Even if some schemes were introduced, they would basically be for the lower economic strata. There is also the aspect of dignity of the person needing financial support. I believe that parents/families of persons with disability from the middle and higher income groups must set aside maximum possible resources so that these disabled persons do not become objects of charity in the future.
The financial needs and solutions are common for the persons covered by The National Trust, barring a few exceptions from the cerebral palsy group, and fewer still from those with multiple disabilities. The 2 basic facts are:
- Inability of the concerned individuals to undertake a salary or wage earning activity
- Inability of the concerned individuals to manage investments and properly utilize the income.
About 3 percent of our population come under the purview of The National Trust, that is about 3 crores. If we assume, for sake of simplicity, that the number of families having more than one child with disability is very small, there would be an estimated 3 crores families having members either with autism or cerebral palsy or mental retardation or multiple disabilities in India.
According to one estimate the income-wise break up of these families is as under:
- 55 % from low income group, including those below the poverty line
- 30 % from the middle income group
- 15 % from upper income group, including the affluent
If this distribution is accepted, 90 lakhs of the families who come under The National Trust programs are in the Middle Income Group (MIG).
What forms the MIG? There is no precise answer. My view is that families who can limit their expenses to within 90 % of their incomes constitute this very important group. Yes, a very important group. If a solution is found for the financial needs of this group through the participation of its members, it can be extended to the Low Income Group (LIG) through sponsorships.
I strongly hold the view that we must try to find a solution assuming availability of funds rather than the other way about. The MIG families can ensure availability of funds through the small savings route.
Let me present the positive side of this picture. Let us assume:
- That the present average monthly expenditure of a person with disability in the MIG family is Rs. 1,500.
- That the family decides to earmark 10 % of this, that is Rs. 150.- per month for the future needs of the person with disability
A simple multiplication gives us a startling result. The MIG families can contribute Rs. 135.- crores per month.
Having identified the source to obtain the required funds, it is necessary to ensure that they are properly canalized through special plans. These plans must:
- Ensure safety of the funds saved or set aside
- Provide investment avenues with a hedge against inflation
- Facilitate regular monthly remittances to the care givers, duly adjusted for inflation, to cover the unpredictable life spans of the beneficiaries.
- Contain appropriate procedure for disbursal
No plan is available at present which meets all these requirements. Various strategies are under the consideration by The National Trust to help the process of introduction of need based plans by the Insurance and Mutual Fund Sectors.
The Jeevan Aadhar Plan of LIC (which is the outcome of my efforts) requires many an improvement. Briefly stated these are in respect of:
- Age of the parent at entry
- Bifurcation of the insurance and annuity stages
- Direct access to the annuity stage
- Favorable rate of return
- >Mechanism to facilitate revision of annuities to cater to rising costs
- Choice about the time of commencement of the annuity payments
- De-linking from IQ criteria
- Permission to sponsors to participate for nominated beneficiaries, by direct entry at the annuity stage, to reduce the pressure on social security funding.
It is obvious that one cannot wait till a perfect plan in available. I am, therefore, attempting to convey my views in relation to the present situation through questions and answers which follow.
|Accumulation of Savings||
Q: When should we start saving?
A: As soon as it is known that your child may not be normal - to use a jargon, as soon as the child's impairment is diagnosed.
Q: There may be financial difficulties at that time. How could one manage to save in such a situation?
A: A token beginning could always be made. Gradually the rate of saving should be raised as much as possible.
Q: What should be the eventual rate of saving?
A: Ten to fifteen percent of the child's expenses, per month.
Q: Why is this reply in percentage terms?
A: The saving must go up in line with the expenses.
Q: Will the capacity to save go down when the expenses go up?
A: Not necessarily. Earnings may also go up in most cases. For example, a clerical job in Mumbai in a large corporation used to fetch about Rs. 100 to Rs. 150.- per month about 40 to 45 years ago. This is now in the range of Rs. 4,000 to Rs. 6,000.-.
Q: If some one wants to set aside a lump sum? What should one do?
A: If the child's age is 5 years and if both the parents are earning, then one month's earning of each of them just once.
Q: What do you mean?
A: Just what I said. One month's income of the father and one month's income of the mother, to be invested and the original saving and the income earned from year to year to be accumulated till the parents retire.
Q: You mean no further direct saving would be needed?
A: Yes and no. If the parents get substantial rise in their incomes resulting in a substantial rise in the standard of living, the matter would need a review.
Q: What would be the lump sum requirement if the parents are elderly?
A: If the child is 25 years old, then 150 times his/her monthly expense at that time should be put aside. This means Rs. 1,50,000.- if the expense is Rs. 1,000.- per month.
I am giving a typical calculation in Appendix - I. You will see that this provision would be enough only for the subsequent 23 or 24 years. That is till the person is about 50 years old. I have not suggested a higher target for saving because the position would be different if special plans are introduced by the Insurance and Mutual Fund Sectors as mentioned in the previous chapter.
Q: If young parents commence saving and there is some unfortunate development, then how would the figure mentioned by you be reached?
A: A part of the saving should be used to insure the parents' own lives. The insurance policy should be assigned to the child. The assignment should be through trustees/guardians whose need is discussed in a later part of this booklet. I would like to clarify two points. First, the children with whom we are concerned cannot be insured. Secondly, contributing to an insurance policy is not an investment. Insurance is necessary to cover life risks.
Q: How should one then go about investing that part of the saving which is not used for obtaining insurance cover?
A: I shall deal with this topic in the next chapter
|Management of Savings - Part I||
Q: In whose name should the savings be invested?
A: Before the child completes the physical age of 18 years, the parents are natural guardians. Till then the savings can be invested in the name of the child and the parents can sign as natural guardians.
Q: What would happen after the child completes 18 years?
A: There are 2 situations, namely:
- The child has IQ below 70
- The child has normal intelligence as in the case of some persons with cerebral palsy.
In the first case the child is considered disqualified in a legal sense and it is necessary to have legal guardians or trustees to operate existing and new investments. Advance actions can be started during the child's minority. In the second case the individual may not need such help.
Q: How should one select the schemes in which the savings may be invested?
A: There are 3 basic considerations:
- Rate of return, that is interest or dividend
Safety does not really need any explanation. For example, money put in a fixed deposit with a Nationalized Bank can be considered very safe, but not so if it is put in a Company Deposit.
Q: The other safe avenues could be?
A: Post Office savings, except Indira Vikas Patra, and debt schemes of Mutual Funds.
Q : Why do you exclude Indira Vikas Patra?
A: Because it is a bearer document like a currency note. If it is misplaced or stolen, you would lose the money - the same way as would happen with gold or silver.
Q: What are Mutual Funds?
A: According to the Association of Mutual Funds in India, a Mutual Fund is a Trust that pools the savings of a number of investors who share a common financial goal. The investors can buy, with as little as a few thousand rupees, the units of a particular Mutual Fund Scheme that has a clearly defined investment objective.
Q: What is an investment objective?
A: There may be several alternatives but I shall mention only the 2 extreme ones, namely, getting safe and steady income or getting advantage of fluctuations in the share market. Our priority is safety.
Q: Earlier you referred to debt schemes. What are they?
A: Debt scheme is a technical term. What it means is that the objective of the scheme is to invest in safe avenues like secured debentures or secured bonds. More detailed information is outside the scope of this booklet.
Q: Why should one buy Mutual Fund Units instead of investing directly in the scheme in which the Mutual Fund may participate?
A: There are 3 reasons:
- Paper work involved
- Record keeping
- The scheme in which a Mutual Fund may participate may require a minimum subscription amount which may be too big for an individual.
Further, a Mutual Fund investment can be in the form of a holding certificate. This certificate cannot be misused.
Q: Could you give some comparison between a Bank Fixed Deposit Receipt or a National Savings Certificate on the one hand and a Mutual Fund Holding Certificate on the other?
A: Mutual Fund Holding Certificate is like a Bank Pass Book. There is no major problem if it were misplaced. Mutual Funds also offer investment plans similar to Bank Recurring Deposits. At present NSCs cannot be purchased in the name of a Family Trust.
Q: We have discussed safety. What about the rate of return and liquidity?
A: Rate of return goes down as the safety increases. For example, a private party may offer a much higher rate of interest than a Bank.
Q: What about liquidity?
A: Liquidity means how soon can one get back the amount invested. For example, withdrawal can be made from a Savings Account with a Bank at any time. But it offers lower rate of interest than a fixed deposit. A Bank Fixed Deposit could not be withdrawn with the same ease without some loss of interest. The higher the liquidity the lower the rate of return.
Q: How does one make the best choice?
A: Safety should be given the highest consideration. Choice between more liquid and less liquid investment would vary from case to case and a text book or tailor made solution or reply is not possible.
Q: Any general suggestion?
A: Never put all the eggs in one basket. That is never put everything in one Bank or one Mutual Fund or one Scheme. At the same time do not opt for too many investment outlets as otherwise there may be problems of keeping track of the investments
|Management of Savings - Part II||
Q: Would you now explain about guardianship and trusteeship?
A: A person with Mental Retardation requires someone to protect his/her rights and interests. These fall into 2 groups. The first relates to protection of the person, like providing personal care and safeguarding personal interests. The other covers protection of property.
Q: Can both these be clubbed together?
A: Guardianship generally implies personal protection but may include protection of the property. Trusteeship is restricted to protection of the property, in my view.
Q: Would the trusteeship cover both movable and immovable property?
A: Yes. But In this booklet I do not wish to discuss matters concerning immovable property.
Q: How can one get guardians and trustees appointed?
A: A legal procedure is now available under The National Trust Act for appointment of guardians for protection of the person as well as the property. A restrictive trusteeship is not provided for in this Act. But a restricted guardianship for protection of the person can be obtained. You may refer to a separate booklet published by The National Trust on this topic. However, when discussing the management of savings, a restricted trusteeship arrangement is possible outside the procedures under this Act.
Q: Would you explain further?
A: The parents may set up an irrevocable family trust as soon as they commence savings and make the investments through the family trust.
Q: What do you mean when you say irrevocable?
A: It means that no change can be made in the deed of trust after it is executed.
Q: What is the advantage?
A: The savings handed over to the Trustees, that is the capital, and the income from the investments are clearly identified as that of the child for whom they are meant. The income is treated as the child's income. Also there is a check on the tendency to utilize this source of funds for routine family needs.
Q: Are family trusts legally valid?
A: Yes! I have set up one for my daughter in 1980.
Q: How does one go about setting up a family trust?
A:The major steps involved are:
- Selecting the trustees, preferably individuals
- Deciding the initial amount to be gifted to create the Trust
- Deciding the objectives of the Trust
- Deciding the mode/channels of investment of the Trust Funds
- Deciding the procedure for filling vacancies of trustees
- Deciding the powers to be given to the trustees
- Deciding the policy for disposal of the Trust Funds at the time of dissolution of the Trust.
The Trust should be irrevocable. Preferably there should be only one beneficiary, if otherwise, the shares of the beneficiaries should be precisely defined.
Q: How to select the Trustees?
A: The parents themselves can be trustees to begin with. At least one more person who knows the child and is known to the child should be included as a trustee as matter of abundant caution.
Q: What about the other steps?
A: Draft of a typical deed of Trust is given in Appendix - II. It has been assumed that the parent setting up the trust would be one of the trustees to begin with. The draft is only suggestive. Changes can be made depending on individual circumstances.
Q: Is any minimum amount required to set up a trust?
A: No. A token amount is enough.
Q: What is the value of stamp paper to be used for the deed of Trust?
A: This varies from State to State and may be revised from time to time. It is better to seek professional guidance at the time of execution of the deed of Trust.
Q: Is legal help necessary in any other respect?
A: Not when only movable assets are involved. I must repeat that I do not wish to discuss matters concerning immovable property. I may add that Associations of Parents could set up guidance centers to help parents. This service may be rendered for an affordable fee.
Q: Is it necessary to register the deed of Trust?
A: In reply to an earlier question I mentioned about my having set up a Trust for my daughter. As per legal advice I had the option to register it or not. Immovable assets were not a part of the Deed of Trust. I have not registered it. I would add that trusts covering immovable property must be registered, there being no option. I suggest that the latest position may be ascertained at the time of execution of the deed of Trust, while ascertaining the value of stamp paper to be used.
Q: Would it not be safer to execute a will rather than set up a family trust?
A: No. A will is like a posthumous child. You would never know the final outcome because there may be complications created by adverse interests. On the other hand, the parents can nurture a Trust during their own life time. It also creates opportunities for regular interaction between the child and the trustees (other than the parents) and the child gets used to the fact it has to depend on the (other) trustees for help.
Q: Do you have any other suggestion?
A: Yes. I have two of them. First, as a matter of abundant caution the deed of Trust should be signed in the presence of a notary. Secondly, there is a need to undertake confidence building programs about the role and working of family trusts. Associations of Parents should therefore take some steps in this direction.
Q: The Income Tax Act gives some concessions to parents of persons with disability and to persons with disability. Is there any linkage between these concessions and what we have discussed so far about family savings invested through family trusts?
A: Yes. The linkage is at three levels.
Q: What is the first level?
A: As mentioned in reply to an earlier question, the income of the family trust is the income of the child. It is assumed that the Trust is irrevocable and the beneficiary is clearly defined. As per current provisions in the Income Tax Act the income of an eligible child with disability is not clubbed with the income of the parent even during the child's minority. The child is treated as a separate assessee. Thus the taxable income of the parent is lower.
Q: What is the second level?
A: This has to do with the steps needed to ensure that the parents do not lose the tax benefits available to them under Section 80(DD) of the I. T. Act just because their children have some income out of funds gifted by the parents themselves. This deduction is Rs. 40,000.- at present if they have a handicapped dependent. There may be some problem of interpretation of this provision because the criteria to determine what constitutes dependence are not explicitly laid down.
Q: Would you elaborate?
A: I have to be careful as I would not like to start a controversy. Associations of parents should play a pro-active role by getting a directive from the Central Board of Direct Taxes (CBDT) that a 'dependent' shall not necessarily mean financially dependent, particularly when there is some income in the name of the dependent arising from funds gifted by the parents themselves for meeting the long term needs of the child.
Q: What is the third level?
A: A child which fulfills the eligibility norm of that disability category gets, as per current provisions, a separate deduction of Rs. 40,000.- under Section 80(U) of the I. T. Act. This is very important when substantial savings or other assets could be transferred to the child through irrevocable gifts.
Q: Would there be no Gift Tax?
A: No, not at present. Draft of a typical gift deed is given in Appendix - III. A one time stamp duty - not under the I. T. Act - may have to be paid for each gift deed, depending on the State level rules.
Q: Is it necessary to register a gift deed?
A: This would depend on the asset being gifted. You may refer to my replies about registration of the deed of Trust given in the preceding chapter.
Q: You have referred to eligibility criteria of disability more than once. What are these?
A: A detailed discussion is outside the scope of this booklet. But I would mention one condition in the IT Act / Rules which is most rigorous. It stipulates that in case of a person with Mental Retardation the IQ should be less than 50. Attempts to have this raised to 70 have not been successful so far. The parents with children in the 50 to 70 IQ range do not get any tax benefits. This is one more area for pro-active advocacy by Associations of Parents.
Q: Do you have any final suggestion or observation?
A: Definitely I have one. Parents should not feel bogged down by any difficulties related to their own tax benefits. The long term interest of the children and the long term benefits should be the over-riding considerations. I feel a sense of satisfaction that I took such a view over 20 years ago.
Appendix - I
- 1. Starting corpus Rs. 1,50,000/-
- 2. Current monthly expense Rs. 1,000/-
- 3. Annual inflation 5 %
- Return on safe investment 12 % p.a.
|Sr. No. of year||Amount available at beginning of the year||Amount the set aside for year's expenses||Amount invested for full year||Amount carried forward|
|Appendix - II
Typical Deed of Trust
THIS INDENTURE OF TRUST made at _____ this ____day of _________ in the year 2001 between_______________________________, at present residing at _____________________________, hereinafter called The SETTLOR (which expression shall, unless excluded by or repugnant to the context, be deemed to include his heirs, executors, administrators and legal representatives) of the ONE PART and
l. ______________________, residing at _____________________________
2. _______________________, residing at _________________________, and
3. _______________________, residing at ________________________ etc.
hereinafter jointly referred to as THE TRUSTEES (which expression shall, unless excluded by or repugnant to the context, be deemed to include The Trustee or Trustees for the time being under these presents and the survivor or survivors of them and the heirs, executors and administrators of any deceased Trustee in so far as the rights and obligations of the deceased Trustee up to his death are concerned) of the OTHER PART.
(1) The Settlor is absolutely seized and possessed of or otherwise well and sufficiently entitled, inter alia, to a sum of Rs________ (Rupees __________) only;
(2) ______________________, son/daughter of The Settlor (hereinafter called The Beneficiary) born at _________on _____day of ______________, has had limited academic progress and having ______________________________ is in need of special attention and support;
(3) The Settlor, in consideration of the natural love and affection which he bears towards The Beneficiary and with a view to make adequate and appropriate provision for The Beneficiary, desires to create a Trust for the benefit of The Beneficiary by making an irrevocable gift of Rs________ (Rupees _____________) only to The Trustees for the creation and subsistence of The Trust herein mentioned;
(4) The Trustees have at the request of The Settlor consented to act as the First Trustees under these presents; and
(5) Prior to the execution of these presents The Settlor has handed over to The Trustees Rs_________ (Rupees_______________ )only in the form of ______________________ which The Trustees have accepted.
NOW THIS INDENTURE WITNESSETH AS FOLLOWS :
In order to effectuate his said desire and in consideration of the love and affection which The Settlor bears towards The Beneficiary, he, THE SETTLOR HEREBY DIRECTS AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AND DECLARED AS UNDER.
2. Name, location and objects of The Trust
2.1 The name of The Trust shall be ________________________ Trust and its office shall be located for the present at _____________________________ and/or such other place or places as The Trustees may from time to time decide.
2.2 The objects of The Trust are :
(a) To provide basic necessities of life to The Beneficiary, including but not limited to shelter, food, clothing, medical attention (including surgical intervention and/or hospitalization), special education and/or training, recreational, social and religious needs and generally to look after the well being of The Beneficiary by utilizing the Trust Funds in a reasonable manner.
(b) To invest and/or conserve and/or utilize the Trust Funds in such a manner as would ensure for The Beneficiary during his/her life time a steady and reasonable standard of living commensurate with what he/she is getting at the time of execution of these presents, due consideration being given to inflation and all other relevant and material facts and circumstances as far as can be visualized by The Trustees.
3. Constitution of The Trustees, their qualifications, obligations etc.
3.1 The number of Trustees herein shall be not less than one and not more than five. When the number of Trustees is more than one, The Trustees for the time being shall elect one of them as Chairman Trustee.
3.2 A person shall be capable of being appointed as a Trustee if prima facie he is a well wisher of The Beneficiary and is known to The Beneficiary.
3.3 A person shall not be capable of being appointed or continued as a Trustee if :
(a) he has not completed the age of 21 years or has completed 75 years, or
(b) he is not at least a matriculate or equivalent or
(c) he has been found to be of unsound mind or
(d) he is an undischarged insolvent or
(e) he has applied to be adjudicated as an insolvent or
(f) he has been convicted of any offence involving moral turpitude or
(g) he has become physically or mentally incapacitated to perform his duties as a Trustee or
(h) he has become a non-resident Indian and/or is away from India for a continuous period of six months or longer.
3.4 Every Trustee shall hold office of Trusteeship subject to the foregoing restriction; provided however that any Trustee may retire as a Trustee by giving _______ days' notice in writing to the other Trustee(s).
3.5 The power to fill in the vacancies in the office of Trustees shall vest in the continuing Trustees. In case there is only one Trustee holding office for the time being who is also not willing to continue as a Trustee or is about to incur any disqualification hereinabove mentioned and he is unable to find any suitable person to act as a Trustee, the management of The Trust shall be handed over by such sole Trustee to the Trustee Department of a Nationalized Bank and/or any reputed Public Trust and/or any reputed Trustee and Executor Company if any in existence at the relevant time, for carrying out the purposes hereof in terms hereof, mutatis mutandis, failing which direction shall be sought by such sole Trustee as aforesaid from appropriate judicial authority.
3.6 Whenever The Trustees for the time being decide to fill in the vacancy or vacancies, if any, in the constitution of The Trustees they shall invite 1) _______ 2)______________ and 3) ______________ to accept Trusteeship under these presents, in that order, and consider other persons only thereafter if need be.
3.7 It is hereby expressly provided that in the event of death of a Trustee his legal heirs or representatives do not ipso facto become entitled to Trusteeship under these presents.
3.8 Each of the outgoing or retiring Trustees hereto shall, as the case may be, respectively sign, execute and do all such documents, deeds acts and things as the remaining Trustees may reasonably require for transfer of the Trust Funds and assets of The Trust as may be held in the names of the outgoing or retiring Trustees, singly or jointly with other Trustees, to the remaining Trustees and for otherwise completing discharge of their obligations in terms of these presents.
3.9 On assumption of office by new Trustees the Trust Funds and assets of The Trust shall vest in the new Trustees jointly with the surviving or continuing Trustees and the new Trustees shall be bound by the provisions of these presents.
4. Management of The Trust
4.1 The Trustees shall hold and stand possessed of the said sum of Rs_______ (Rupees _________) only and/or the investments for the time being of the same and/or accumulations, additions and accretions thereto and/or conversions thereof and/or interest, dividends or other income of The Trust Fund (hereinbefore and hereinafter called The Trust Funds) upon trust for the benefit of The Beneficiary.
4.2 The Trustees shall profitably invest the Trust Funds and shall receive and be entitled to hold the income of The Trust absolutely for the benefit of The Beneficiary and shall do all such acts, deeds and things as are necessary for fulfillment of the objects of The Trust.
4.3 The Trust Funds shall not be used for any activity the resulting income, gain or surplus from which is likely to be interpreted as business income.
4.4 Nothing in the preceding sub-clause shall prevent The Trustees from utilizing a reasonable part of the Trust Funds for activities such as _________if the sole purpose is to keep The Beneficiary suitably occupied as per professional advice to prevent any behaviour problems arising from idle time.
4.5 The investment of the Trust Funds shall be restricted to avenues/instruments permissible for investment of funds by Societies registered under the Societies Registration Act 1860 and/or the Bombay Public Trusts Act 1950 hereinafter referred to as Trustee Securities.
Provided however that the foregoing condition shall by itself not be a restriction coming in the way of The Trustees accepting gifts, bequests etc. in other forms but so nevertheless that such additions to the Trust Fund shall be converted into Trustee Securities at the earliest possible opportunity.
4.6 The Trustees shall continue to hold and utilize the Trust Funds for fulfilling the objects of The Trust and for the benefit of The Beneficiary even in the event of a marital alliance or companionship arrangement materializing for The Beneficiary and any person or persons who may as a result be interested in the affairs of The Beneficiary shall not automatically have any claim either on the Trust Funds and/or share in the income of The Trust, and/or any claim to be invited to join as Trustees under these presents.
4.7 In the event of the parents of The Beneficiary being disabled or otherwise unable to provide appropriate support to The Beneficiary and more particularly after the demise of the parents of The Beneficiary, The Trustees shall make such arrangements as they deem fit, including if absolutely necessary and unavoidable, enlisting the help and/or services of appropriate and bona fide voluntary organization(s) if any in existence at the relevant time or times for ensuring the well being of The Beneficiary and shall be empowered to incur such expenses as may be necessary for the purpose after taking due care to ensure that the monies if any paid to such organization(s) would be utilized by the organization(s) in question for the intended purpose.
4.8 The Trustees shall frame appropriate guidelines and/or rules for the day to day functioning of The Trust.
5. Accounting year, accounts, taxation etc.
5.1 The accounting year of The Trust shall be from the 1st of April of an year to the 31st of March of the immediately succeeding year.
5.2 The Trustees shall cause to be filed Income Tax Returns of The Beneficiary as an individual assessee including therein the income from The Trust and the income from his personal assets, if any.
5.3 The Trustees shall also cause to ensure compliance with other applicable laws, rules or regulations.
6. Meetings of The Trustees
The Trustees shall hold meetings at least once in each calendar quarter and in case of difference of opinion the majority shall prevail. In the event of a tie, The Chairman Trustee shall have a casting vote (in addition to his own as a Trustee).
7. Powers of The Trustees
The Trustees shall be jointly and severally responsible and shall have the powers as under:
(a) To manage all Trust Funds and assets of The Trust including the conduct and management of its affairs.
(b) To appoint employees and/or engage contractors and to settle the relevant terms and conditions, including those pertaining to dismissal and/or termination.
(c) To file suits on behalf of The Trust, to compound suits filed or refer any differences with third parties for arbitration.
(d) To consult doctors, lawyers, chartered accountants and/or any other professionals or specialists.
(e) To invest The Trust Funds in the name of The Trust and/or jointly in their names in risk free avenues and to alienate investments for consideration.
(f) To open, operate and maintain and/or close Account(s) with any Nationalized Bank, or Scheduled Indian Bank or reputed Foreign Bank operating in India, in the name of The Trust and/or in their name(s), to be operated jointly by any two of them.
(g) To hire safe deposit lockers in Banking and/or non-banking companies of repute in the name of The Trust and/or of The Trustees to be operated jointly by any two Trustees.
(h) To receive annuities or pensions or social security payments, by whatever name called, as may accrue to The Beneficiary from schemes launched by any Government, Government Agencies or reputed others.
(i) To participate in social welfare schemes under any Central or State Government programme for the population in general or for persons with some form of inadequacy which may be recognized as a disability or otherwise howsoever.
(j) To participate in tax saving schemes in the name of The Trust when the rules permit or in the names of The Trustees if otherwise.
(k) To accept gifts in cash or kind or of movable or immovable property from any person for the purpose of The Trust upon such terms and conditions as they deem fit, being not inconsistent with or violative of the terms hereof.
(l) To receive property and/or funds and/or acquire other interests accruing to The Beneficiary through bequests, nominations, assignments or inheritance so long as there is no violation of the objects of The Trust herein and it is not inconsistent with these presents or unlawful or detrimental to The Beneficiary in any way.
(m) To issue receipts for monies and/or documents pertaining to the functioning of The Trust.
(n) To reimburse themselves out of the Trust Funds all expenses incurred by them in the discharge of their duties under these presents but not for their own professional or other services or effort.
(o) To draw upon the corpus of The Trust, if in the discharge of the functions hereunder, they have no option but to do so and/or utilize the corpus for securing annuity and/or participating in a pension scheme for The Beneficiary.