A trust is a legal instrument created in terms of the Trust Property Control Act of 1988 whereby a trust deed is created by the founder for the benefit of identified beneficiaries.
There are three categories of parties to a trust, namely:
Founder – the person who establishes the trust;
Trustees – these are custodian who administers the trust; and
Beneficiary(ies) – the person(s) who benefit from the trust assets or income
Trust deed is the founding document that serves as a constitution. It regulates the affairs of the trust including, but not limited to, powers and responsibilities of trustees, how and when beneficiaries should benefit, and termination of the trust.
For a trust to be valid it has to be registered with the Master of the High Court who issues Letters of Authorities to trustees mandating them to act on behalf of the trust.
Trust benefits Asset protection
Assets in a trust do not belong to trustees or beneficiaries and as a result, cannot be attached in the insolvency of one of the parties to a trust. They can also be excluded from Continuity
Trusts have a life span that exists intergenerationally unless stated otherwise by the founder in the trust deed.
It is always advisable for any person(s) who wants to establish a trust to obtain proper legal advice so that they can exercise available options on the kind of trust instrument they want to create and what form it needs to take.
