What Type of Trust is a Testamentary Trust?

A testamentary trust is a trust established by a clause in a valid will that only comes into existence on the death of the testator and is funded from the assets of the deceased estate. It is distinct from an inter vivos (living) trust created during the testator’s lifetime, and from the SARS-defined “special trusts” (Type A and Type B); its defining feature is that the trust deed is the will itself, and it cannot be registered, funded, or administered until the Master of the High Court has issued Letters of Authority in the deceased estate and the trustees named in the will have been formally authorised to act under section 6 of the Trust Property Control Act 57 of 1988.

The Short Answer: Where a Testamentary Trust Fits in the Trust Typology

A testamentary trust is one of the principal categories of South African trust, sitting alongside inter vivos (living) trusts and the SARS-defined special trusts (Type A and Type B). The defining characteristic is the moment of creation: a testamentary trust does not exist during the testator’s lifetime — it is born on death, by operation of the will.

Functionally, it is a vehicle for managing and distributing estate assets for the benefit of heirs — often minor children, a surviving spouse, or beneficiaries who cannot manage their own affairs — without transferring ownership to those heirs outright. This is the gap Burger Huyser Attorneys’ Wills & Estates practice is built to close: drafting the clause in the will, then stepping in after death to administer the estate and the trust that flows from it.

How a Testamentary Trust Is Created

A testamentary trust is not created by a separate trust deed signed during the testator’s life. It is established by a clause — the “testamentary trust clause” — inside the testator’s will. Because the will is the founding document, the trust only takes legal shape once the will itself is admitted to probate.

The will must comply with the formalities for a valid will under the Wills Act 7 of 1953 — failure of the will (for example, due to improper signing or lack of testamentary capacity) invalidates the trust with it. The testator (referred to as the “testator” once the will takes effect, not the “donor” — that term applies to inter vivos trusts) names the trustees, the beneficiaries, and the trust terms all inside the will.

On the testator’s death, the will is lodged with the Master of the High Court. The trust cannot be registered, funded, or operated until the deceased estate has been reported and the Master has issued Letters of Authority.

The Role of the Master of the High Court

The Master of the High Court has jurisdiction over the deceased estate, not directly over the trust itself. The Master’s role in the trust lifecycle is therefore twofold, and runs in sequence:

1. Estate administration: The Master appoints an executor in the estate (or confirms the nominated executor named in the will). The executor gathers assets, settles liabilities, prepares the liquidation and distribution account, and only then transfers assets into the testamentary trust.
2. Trustee authorisation: The trustees named in the will must then apply to the Master for authorisation to act as trustees under section 6 of the Trust Property Control Act 57 of 1988. Until that authorisation is granted, no trust property may be lawfully dealt with.

This is a common cause of delay when heirs expect the trust to be operational immediately on death. The estate can take months (sometimes longer, if the Master queries the liquidation account) to wind up, and the trust cannot legally function in parallel.

Funding: How the Trust Actually Receives Its Assets

A testamentary trust is funded from the residue of the deceased estate, from a specific bequest, or from nominated assets directed into the trust by the will. The actual transfer of assets from the estate to the trust happens only after the executor has finalised the liquidation and distribution account and the Master has issued a final confirmation.

Until that point, trust assets remain part of the deceased estate and are subject to estate administration costs and creditors’ claims. This is materially different from an inter vivos trust, which is funded by the donor during life and never forms part of a deceased estate.

Source of trust funds at a glance

Funding source	When it transfers to the trust	What can delay it
Residue of the estate	After Master’s confirmation of the liquidation account	Creditor claims, Master’s queries, missing assets
Specific bequest	Once the estate’s general liabilities are settled	Shortfall in the residue, specified asset valuation disputes
Named asset (e.g. a property, share portfolio)	After transfer duty and registration (if immovable property)	Deeds Office delays, consent from co-owners

Trust Property Control Act Requirements

Section 6 of the Trust Property Control Act 57 of 1988 requires trustees to be authorised by the Master before they can act, and this applies to testamentary trustees just as it does to inter vivos trustees. A trustee who acts without Master’s authorisation commits an offence and may be held personally liable for trust dealings.

Once authorised, the trust must be registered with the Master. Trustees must keep proper accounting records and, once the trust is operational, may need to lodge financial statements depending on the trust’s size and the requirements of the Master office in the relevant jurisdiction.

SARS Treatment: Tax Implications Worth Knowing

SARS classifies a testamentary trust under the same income-tax regime as other trusts — it is not, by default, a “special trust.” By default, a testamentary trust is taxed at the flat 45% rate that applies to ordinary trusts.

A testamentary trust can, however, qualify as a special trust Type B under the Income Tax Act (a trust for the benefit of a person with a mental or physical disability) or, more rarely, special trust Type A (a trust created solely for the benefit of a minor child who is orphaned, or whose parents have died or are incapable of caring for them, within the statutory window). Where the trust qualifies as a special trust, it is taxed on a more favourable sliding scale rather than at the flat 45% rate.

Estate duty, capital gains tax at death, and the section 4A “limited estate duty deduction” for bequests to a surviving spouse all interact with how the trust is funded. A tax-aware will draft matters; the trust vehicle alone does not displace estate duty.

Common Uses: Why People Set Up Testamentary Trusts

• Protecting assets for minor children until they reach an age specified in the will (commonly 18, 21, or 25).
• Providing for a surviving spouse while preserving the capital for the children of the marriage.
• Supporting a beneficiary who is unable to manage their own financial affairs — disability, substance dependency, or immaturity.
• Ring-fencing a family business or a specific asset so it does not pass outright to a single heir who might dispose of it.
• Delaying the outright transfer of wealth where heirs are not yet ready to receive it.

How a Testamentary Trust Compares to Other SA Trust Types

Feature	Testamentary Trust	Inter Vivos (Living) Trust	Special Trust (Type A/B)
Created by	Will, on death	Trust deed, during lifetime	Trust deed or will (if criteria met)
Takes effect	On testator’s death	On signing and registration	Varies — Type A typically orphan/minor criteria
Funded from	Deceased estate assets	Donor’s assets during life	Either, depending on qualifying event
Master’s oversight	Yes (estate + section 6 trustee authorisation)	Yes (section 6 trustee authorisation)	Yes
Default income-tax rate	45%	45%	Sliding scale (more favourable)
Can hold assets during donor/testator’s life?	No	Yes	Yes
Avoids estate administration?	No (estate must be wound up first)	Yes	No

What Can Go Wrong (Practical Risks)

• The nominated trustees refuse to act, are deceased, or lack the capacity to administer — the will should include a clear succession of trustees.
• The Master’s Office raises queries on the liquidation account, delaying distribution into the trust by months.
• A beneficiary challenges the trust clause on the basis that it is unreasonable or that the testator lacked capacity.
• The trust is poorly drafted, leaving trustees uncertain about their discretion, distribution triggers, or the powers they have to invest or alienate trust assets.
• Section 3(1)(d) of the Wills Act can invalidate bequests to a trustee, or to a person married to a trustee, unless the will expressly authorises it — a drafting trap that comes up in practice.

When to Get Legal Help

Legal input is genuinely useful at four points in the lifecycle of a testamentary trust:

1. Drafting the testamentary trust clause as part of a will — particularly where minors, disabled beneficiaries, or a family business are involved.
2. Advising on the interaction between the trust clause and other will provisions (accrual claims, maintenance claims by a surviving spouse, foreign-heir considerations).
3. Acting on behalf of the trustees to apply to the Master for Letters of Authority in the deceased estate and trustee authorisation under section 6.
4. Restating or rectifying a trust where the original will clause is ambiguous or has been challenged.

Burger Huyser Attorneys’ Wills & Estates team handles both ends of this — the will draft and the post-death estate administration — and its Deceased Estate Administrator (Lance Pearson) coordinates the Master’s Office process and supports trustees through the section 6 authorisation step, which is the most common sticking point when families assume a trust is operational immediately on death.

Locating the Right Master’s Office

The Master’s Office has regional seats in each of South Africa’s provincial divisions — Johannesburg, Pretoria, Cape Town, Pietermaritzburg, Bloemfontein, Grahamstown, and Kimberley — with sub-offices in larger metropolitan areas. The deceased estate for a testator whose assets are centred in Gauteng is typically reported to the Master’s Office in Johannesburg or Pretoria, depending on where the testator was ordinarily resident at death. Clients outside Gauteng are usually referred to a correspondent attorney in the Master’s jurisdiction where the deceased was resident at death, since the Master’s authority is territorial.

Frequently Asked Questions

Does a testamentary trust exist before the testator dies?

No. A testamentary trust is a creature of the will — it has no legal existence, no assets, and no trustees acting on its behalf until the testator dies. Before then, the relevant clause in the will is simply a future instruction that takes effect only on death.

Who administers the trust before the trustees are appointed?

The executor of the deceased estate administers the estate assets until they are transferred into the trust. The trustees named in the will must then apply to the Master of the High Court for authorisation to act under section 6 of the Trust Property Control Act 57 of 1988 — until that authorisation is granted, the trust is in a limbo state and the nominated trustees cannot lawfully deal with trust property.

Can a testamentary trust avoid estate duty?

Not by itself. Assets that pass into a testamentary trust are still part of the deceased estate for estate-duty purposes, and the trust does not change who is liable for estate duty on those assets — it only changes how the assets are held and distributed after the estate has been wound up. Proper estate planning (including the section 4A deduction for bequests to a surviving spouse and other reliefs) is what manages estate duty, not the trust vehicle alone.

How is a testamentary trust different from leaving money directly to a minor?

An outright bequest to a minor is held by the minor’s guardian (or by the Master’s nominee) until the minor reaches majority, at which point the funds are released outright. A testamentary trust instead allows the testator to set conditions — age thresholds, staged distributions, purpose restrictions, ongoing trustee discretion — that continue to govern the funds long after the minor reaches 18. It is the standard tool used to delay or stagger inheritance to young beneficiaries.

What happens to a testamentary trust when its purpose is fulfilled?

Once the trust’s terms have been fully performed — typically when the final beneficiary reaches the age or trigger specified in the will, or when the trust assets have been fully distributed — the trust can be wound up. The trustees apply to the Master for a discharge from their duties, the trust’s final accounts are lodged, and the trust is deregistered. Until then, the trust continues to exist, must file annual or periodic returns, and remains under the Master’s supervisory jurisdiction.

Can a testamentary trust be challenged after the testator’s death?

Yes. A beneficiary or an interested party can challenge a testamentary trust clause on the same grounds that any other will provision can be challenged — for example, that the testator lacked testamentary capacity, was unduly influenced, or that the clause is unreasonable in the context of a maintenance claim by a surviving spouse or child under section 2 of the Maintenance of Surviving Spouses Act. The trust clause does not enjoy any special immunity from such claims.

Drafting a testamentary trust is one part of a will, and administering it is one part of winding up a deceased estate — Burger Huyser Attorneys’ Wills & Estates team handles both ends. If you are drafting or updating a will and want to include a trust for minor children, a surviving spouse, or a beneficiary who needs ongoing management of their inheritance, contact the firm on 011 888 0246 or visit the head office at 49 First Avenue, Linden, Randburg, 2195. For clients handling an existing deceased estate and needing assistance with trustee appointment under section 6 of the Trust Property Control Act 57 of 1988, the firm’s Deceased Estate Administrator can coordinate with the Master’s Office on your behalf. Burger Huyser Attorneys carries a 4.8/5 average across 250+ Google reviews (Trustindex verified “Top Rated Law Firm in South Africa”) and was named Best Family Law Firm 2024 – South Africa (Lawyers Monthly Legal Awards 2024) and Best Multi-Sector Law Firm 2023 – Johannesburg (Acquisition International Legal Awards 2023). The firm also supports clients across its Gauteng branches — Centurion (012 644 4990), Pretoria Menlyn (012 471 5700), Sandton (011 253 3080), Roodepoort (011 668 0030), Bedfordview (011 201 7190), Alberton (011 439 3990), and Midrand (010 022 4082).