Law of Trusts

A trust is created by a person who will transfer title(s) of some or all property to the trustees of the trust, who then holds title to that property in trust for the benefit of the beneficiaries. This may be done for tax reasons or to control the property and its benefits if the individual who created the trust is absent, incapacitated be it mentally or be sequestrated, or deceased. It is common for those establishing a trust to be both trustees and beneficiaries, but most trusts will have at least one independent trustee (a trustee who is not a beneficiary) many people appoint someone they trust such as a family friend or attorney.

There are two main types of trusts:

1. Trust between living persons (inter vivos trusts) (created by living persons through an agreement)
2. Testamentary trusts (created in terms of a Will).

An example of an inter vivos trust is a family trust. This is set up to benefit relatives of the grantor (person who creates the trust). Its purpose is to benefit the grantor’s family (wife, children, adopted children, parents and so forth)

How to appoint a trustee:

• you will need a letter to the Master listing all documents
• The trust deed
• A sworn affidavit by the person who wants to be appointed (prescribed form)
• the Acceptance of trust (prescribed form)
• Certified Copies of the Applicants Identification document
• Resolution signed by the current trustees appointing the individual as a trustee

How do you put a property in trust?

1. What type of deed do you want to use?
2. Have the chosen deed prepared and signed
3. Have the deed registered.
4. Inform the trustees of the newly registered deed.

The Disadvantages of a Living Trust

• It can be expensive to start a living trust.
• They are often quite complex and may require expert assistance.

Trusts offer more control of assets, but they are more expensive, can be difficult to set up, and must be continuously managed.

To be valid, a trust must identify the following: the trustor, the trustee, the successor trustee, and the trust beneficiaries.

The main statute that governs South African trust law is the Trust Property Control Act of 1988, which regulates certain administrative aspects relating to trusts. South African trusts are also governed by the Income Tax Act, the Estate Duty Act, and common law.