Page 19 - Nexia SAB&T Trust Guide 2022

BENEFICIARIES OF A TRUST

The beneficiaries are named in the trust instrument and can be:
■ Income beneficiaries (benefit from income derived from trust assets or the
use of trust assets).
■ Capital beneficiaries (benefit from distribution of a portion or the whole of the
capital assets).

The qualifications of beneficiaries
■ Any person (unborn or alive) can be a beneficiary of the trust.
■ There is no limit to the number of beneficiaries of a trust.
■ Persons other than natural persons can be beneficiaries, for example duly
registered trusts, juristic persons, associations or classes of beneficiaries –
as long as the beneficiary/s are able to be clearly identified, or are readily
ascertainable.
■ The founder of a trust may also be a trustee or a beneficiary of the trust or
both, but he may not be the only trustee.
Beneficiaries must be identifiable or readily ascertainable
■ The Trust Property Control Act does not define a beneficiary, however a trust
without identified or identifiable beneficiaries is invalid.
■ A natural person, as a beneficiary, should be identified by name and
preferably an identity number.
■ A “class of persons”, as beneficiaries, should be identifiable through the
description of such a class, such as “the descendants of....”.
■ The trustees should not have the power to appoint any beneficiaries. In a
family inter vivos discretionary trust, the beneficiaries should be defined
with reasonable certainty and be determined or determinable from objective
criteria such as “the children of X”. Phrases such as “those beneficiaries
which the trustees will select as they see fit from no defined class” are not
permitted.

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