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Transfer for benefit of unborn person


Section 13 of the TPA, 1882, allows property to be transferred for the benefit of an unborn person. This means that a person can create a transfer of property to take effect when a child is born in the future. This provision is crucial for estate planning and ensuring the financial security of future generations. 

Transfer for benefit of unborn person
(S.13)
Where, on transfer of property an interest. Therein created for the benefit of a person not in existence at the date of the transfer , subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining Interest of the transferor in property.

Illustration
A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.


Essential Elements

For a valid transfer for the benefit of an unborn person, the following elements are essential:

1)  Transferor: The person who transfers the property.

2) Trustee: The person who holds the property for the benefit of the unborn person.

3) Unborn Beneficiary: The child who will inherit the property upon birth.

4) Property: The subject of the transfer, which can be movable or immovable property.

Types of Transfers

There are two main types of transfers for the benefit of unborn persons:

 * Gift: The transferor gifts the property to the unborn person, with the trustee holding it until the beneficiary's birth.

 * Settlement: The transferor creates a trust, transferring the property to the trustee for the unborn beneficiary's benefit. The terms of the trust dictate how the property is managed and distributed.

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