REGISTRATION & TYPES OF TRUSTS IN SOUTH AFRICA EXPLAINED

There are various ways to safeguard your assets and ensure that it is managed adequately – an estate planning measure used to achieve this goal is that of a trust. The field of trust law can be very complex, leaving most people in the dark about the inner workings and possibilities offered by the law of trusts.

What is a Trust?

A trust is a legal entity created by the founder, who intends for beneficiaries of the trust to receive benefits from it. The founder appoints trustees, who manage the trust assets on behalf of the beneficiaries as well as for their benefit.

Are there different types of Trusts?

Yes, there are two main categories of trusts in South Africa, namely:

Ownership Trust: Upon creation of the trust, the founder transfers the ownership of the trust property to vest in the trustees in their fiduciary capacity. The trustees will manage the trust property for the benefit of the beneficiaries. Bewind Trust: Upon creation of the trust, the founder causes the ownership of the trust property to vest in the beneficiaries of the trust. The trustees must still administer the trust property for the benefit of the beneficiaries.