Other Non-Trading Institutions 🛡️

1. Trust Accounts 🤝

Definition: A Trust is an obligation annexed to ownership of property for the benefit of another (Beneficiary).

• Author: Creator of trust.
• Trustee: Manager of trust property.
• Beneficiary: Person for whom trust is created.

Documents Required:

• Trust Deed: The Bible of the trust! (Contains powers, objectives).
• Registration Certificate (Public Trusts).
• Resolution of Trustees.

Rules for Bankers:

1. Read the Deed: Check if Trustees have power to open account/borrow.
2. All Trustees must join: Unless Deed allows delegation, ALL trustees must act jointly.
3. No Personal Benefit: Trustee cannot mix trust money with personal money.
4. Charitable Trusts: Need clearance from Charity Commissioner (in some states).
5. Death: On death of a trustee, office passes to surviving trustees (or new trustee appointed as per Deed).

2. Executors and Administrators ⚖️

When a person dies leaving a Will:

• Executor: Person named in the Will to manage property.
• Probate: Court order certifying the Will.

When a person dies WITHOUT a Will (Intestate):

• Administrator: Person appointed by Court to manage property.
• Letter of Administration: Court order appointing him.

Banking Operations:

1. Account Name: "Estate of Late Mr. X, by Executor Mr. Y".
2. Powers: Executor derives title from Will (immediately on death). Administrator derives title from Court Order.
3. Joint Executors: Usually, any one can operate (unlike Trustees who must act jointly).
4. Borrowing: Only for paying "Death Duties" or preserving assets.

3. Joint Hindu Family (HUF) 🕉️

Definition: Family business governed by Hindu Law.

• Karta: Head of family (Senior most male/female).
• Coparceners: Other members (have birthright).

Rules:

1. Karta operates: Only Karta has implied power to manage and borrow.
2. Joint Family Letter: Signed by all adult coparceners (to bind them).
3. Death of Karta: Senior most coparcener becomes new Karta.

Quiz Time! 🎯

💡 Final Wisdom: "Trustees and Executors are handling 'God's money' or 'Dead man's money'. Bankers must ensure it's not misused!" 🛡️👻

🎉 UNIT II COMPLETE! You have mastered the Banker-Customer Relationship. From Minors to Companies to Trusts!

Next Unit: Unit III: Negotiable Instruments - Cheques, Bills & Endorsements! ✍️