Page 22 - Nexia SAB&T Estate Planning Guide 2024

Trusts
General information on trusts

n A trust is a structure which has been set up by the founder, into which
property is transferred and is then administered by trustees on behalf of
one or more beneficiaries, in accordance with the deed of trust or Will (as
the case may be).
n In South Africa, the written trust instrument is automatically governed
by the Trust Property Control Act (no.57 of 1988), which regulates most
aspects relating to a trust’s administration. All actions and decisions
taken by the trustees must be made in reference to the trust deed and
the Trust Property Control Act.
n “Property” in a trust may be movable, immovable, including contingent
interests in property, which are to be administered or disposed of by a
trustee in terms of the deed.
n Beneficiaries can be specifically named, or they can be a specified group
or “class”. A class of beneficiaries can be broadly defined, for example, a
trust on behalf of all descendants, including any unborn descendants. As
long as the class of beneficiaries is ascertainable.
n The trustees must be authorised and have capacity (for example, in
South Africa, when you turn 18, you are free to contract and conduct
your own affairs without your parent or guardian’s assistance).
n The essential elements for creating a valid trust are: (a) a serious
intention to create it (b) the intention is expressed in a manner which is
legally valid in order to create an obligation (c) the trust property must
be determined or easily determinable (d) the trust object must be clear
and lawful.
n A trust is regarded as a ‘person’ for tax purposes in terms of the Income
Tax Act, Transfer Duty Act and Value-Added Tax Act, and for registration in
the deeds office.
n Perpetuity- the trust ordinarily continues to exist as an entity, despite the
death of the founder, a trustee or beneficiary. An audit is not required by
law.

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