Trustee Appointment — Roles, Responsibilities & Legal Requirements
Who holds the money under an MWP policy: special trustees under section 6 of the Married Women's Property Act, 1874, the Official Trustee where none is appointed, what a trustee may and may not do with the money, and which questions are left to the insurer's addendum.
Why there is a trustee at all
A section 6 policy is a trust for the wife and children. A trust needs someone to hold the property for the people it is meant for, and that person is the trustee. Under an MWP policy the money is paid to the trustee, who holds it for the wife and children according to the interest expressed in the policy.
Special trustees and the Official Trustee
Section 6 allows special trustees to be appointed to receive and hold the money. In practice they are named in the insurer's MWP addendum.
The section also provides for the case where none is in place. Unless special trustees are duly appointed, the money, when it becomes payable, is paid to the Official Trustee of the State, who holds it on the trusts expressed in the policy. The trust therefore does not fail for want of a trustee; the beneficiaries are the same either way.
Who may be a trustee
The section does not say who may be a special trustee. Whether the proposer himself can act is set by each insurer's MWP addendum, and insurers differ. The addendum for the particular policy has to be read; a rule taken from one insurer's paperwork cannot be assumed for another.
Older material refers to 'Form A' and 'Form B' in this connection. These are insurers' own labels for their addenda, not statutory forms.
What a trustee must do
A trustee holds the money for the beneficiaries, not for himself and not for the husband's creditors. The MWP Act creates the trust but does not list a trustee's duties. The general duties of trustees of a private trust, such as taking proper care of trust property and acting for the beneficiaries, are set out in the Indian Trusts Act, 1882. Section numbers quoted for these duties in older material are not reliable and are not given here.
A trustee's own position does not change the trust. If the trustee had personally lent money to the husband, he still receives the policy money on the trusts expressed in the policy and holds it for the wife and children. Section 6 keeps the policy outside the claims of the husband's creditors, and a trustee who happens to be a creditor is in no better position. The only exception in the section is a policy effected with intent to defraud creditors.
Rules at a glance
A trustee who is owed money
Illustration: Prakash names his cousin Dinesh as trustee of an MWP policy for his wife and daughter. Some years later Dinesh lends Prakash ₹5,00,000 for his shop. Prakash dies with the loan unpaid, and the insurer pays the policy money to Dinesh as trustee.
Dinesh cannot keep ₹5,00,000 out of it for himself. He received the money on the trusts expressed in the policy, for the wife and daughter, and section 6 keeps the policy outside the claims of the husband's creditors. Being the trustee gives him no better position than any other creditor. His loan remains a debt that Prakash owed; the policy is not part of Prakash's estate and is not available for it.
Had Prakash named no trustee at all, the money would have been payable to the Official Trustee of the State and held for the same two beneficiaries.
Key points
- Money under an MWP policy is held by a trustee for the wife and children.
- Section 6 allows special trustees to be appointed to receive and hold the money.
- If no special trustee is appointed when the money becomes payable, it is paid to the Official Trustee of the State.
- The section does not say who may be a special trustee; that is set by each insurer's MWP addendum.
- The general duties of trustees are in the Indian Trusts Act, 1882.
- A trustee who is also a creditor of the husband holds the money for the beneficiaries all the same.
Common misunderstandings
- The trust does not lapse if no trustee was named: section 6 makes the money payable to the Official Trustee of the State.
- The Act does not say the proposer can or cannot be the trustee: that depends on the insurer's MWP addendum.
- A trustee is not the owner of the policy money: he holds it for the wife and children.
- A trustee's duties are not listed in the MWP Act: the general duties are in the Indian Trusts Act, 1882.
- A trustee who lent money to the husband has no first claim on the proceeds: a trustee-creditor is in no better position than any other creditor.
Questions people ask
Can the proposer be the trustee of his own MWP policy?
It depends on the insurer's MWP addendum. Section 6 does not say who may be a special trustee, and insurers differ.
What happens if no special trustee is in place when the claim arises?
The money is payable to the Official Trustee of the State, who holds it on the trusts expressed in the policy.
Which law sets out a trustee's general duties?
The Indian Trusts Act, 1882.
Does the trustee decide who benefits?
No. The beneficiaries and their interests are those expressed in the policy; the trustee holds the money for them.
What this lesson relies on
- Married Women's Property Act, 1874 — section 6
- Indian Trusts Act, 1882 (general duties of trustees)
- Insurers' MWP addenda (each insurer's own rules on who may be a trustee)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.