Page 9 - Nexia SAB&T Trust Guide 2024

TYPES OF TRUST

There are various ways of describing trusts or trust types in South Africa, and
they are not necessarily mutually exclusive. Therefore, depending on how the
trust is structured, there may be overlaps, and a trust may be categorised, for
example, as a discretionary, inter vivos, family trust. Some of the various types or
categories of trust (which may overlap with each other) are described below.
Ownership Trust – Section 1(a) of the Trust Property Control Act describes such a
trust as “the arrangement through which the ownership in property of one person
is by virtue of a trust instrument made over or bequeathed to another person,
the trustee, in whole or in part, to be administered or disposed of according to
the provisions of the trust instrument, for the benefit of the person or class of
persons designated in the trust instrument, or for the achievement of the object
stated in the trust instrument.” These are the typically discretionary family trusts.
Bewind Trust – Section 1(b) of the Trust Property Control Act refers to such a
trust as “the arrangement through which the ownership in property of one person
is by virtue of a trust instrument made over or bequeathed to the beneficiaries
designated in the trust instrument, which property is placed under the control of
another person, the trustee, to be administered or disposed of according to the
provisions of the trust instrument for the benefit of the person or class of persons
designated in the trust instrument, or for the achievement of the object stated
in the trust instrument”. These are vested trusts, where the assets belong to the
beneficiaries, but are managed by the trustees.
Curatorship Trust: Similar in structure to a bewind trust, except that the assets
are administered on behalf of a beneficiary who does not have the capacity to
manage his /her own affairs.
Trusts are also described according to when they are created
Inter Vivos (Living) Trust: This is a trust created during the founder’s lifetime.
It is established by a trust deed which sets out who the founder, trustees and
beneficiaries are, defines the powers and duties of trustees and how and when
the trust is to be wound up. The founder may also be co-beneficiary and /or
trustee. The founder usually donates assets to the trust.
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