The Cost of Registering a Trust in South Africa

The cost of registering a trust in South Africa, drafting a trust deed, and registering it in South Africa typically starts anything from R14,000. This includes a registration fee payable to the Master of the High Court. These fees cover the preparation of necessary documents, consulting fees, and the Master’s office registration fees. It’s also essential to budget for ongoing costs, such as trustee fees, accounting fees, and tax-related expenses.
South African trusts are governed by the Trust Property Control Act 57 of 1988 and the Companies Act 71 of 2008, which regulate the responsibilities of trustees and the administration of the trust.

Setting up a trust is an effective way to manage and protect assets for the benefit of chosen beneficiaries. In South Africa, opening a trust involves several essential steps, including registration with the South African Revenue Service (SARS) for income tax purposes and with the appropriate Master of the High Court. The Master’s office, where the bulk of the trust’s assets are located, will typically oversee the trust’s registration.

What Are the Requirements to Register a Trust in South Africa?

To create a valid trust, there are 5 essential requirements:

  1. Intention: The founder of the trust must clearly express the intention to create a trust.
  2. Legal Obligation: The founder’s intention must be formalized in a legally binding manner, typically through a written agreement, will, or court order.
  3. Trust Property: There must be a clear definition of the trust assets.
  4. Trust Object: The trust’s purpose and objectives should be clearly defined. This includes differentiating between the trust’s core objective and its day-to-day operations.
  5. Lawfulness: The trust’s purpose must be lawful, ethical, and in line with public policy. Selecting the appropriate trust structure is crucial. A consultation with one of our specialist trust attorneys can ensure that your trust complies with legal standards and that your trust deed aligns with your specific goals.

How Long Does It Take to Register a Trust?

The registration process for a trust in South Africa generally takes a few weeks to several months. Factors influencing the timeline include the accuracy of submitted documents, the processing speed of the Master’s office, and any additional requirements that may arise. Engaging an experienced attorney can expedite this process, as they ensure all documents are correctly completed and handle follow-ups with the Master’s office.

Types of Trusts and Costs in South Africa

Understanding the types of trusts available can help you choose the best structure for your needs:

1. Inter Vivos (Living) Trust

  • Cost: R10,000 to R20,000 or more
  • Details: An inter vivos trust is created during the lifetime of the founder. The costs generally include drafting the trust deed, registration with the Master of the High Court, and consultation fees for professional advice on structuring the trust.

2. Testamentary Trust

  • Cost: R14,000 to R15,000 or more
  • Details: A testamentary trust is established upon the death of the founder through a will. The costs typically include drafting the will, preparing the trust deed, and administrative fees for post-death asset distribution. These trusts can be more complex due to the involvement of an estate.

3. Special Trust

  • Cost: R10,000 to R14,000 or more
  • Details: A special trust is created for specific beneficiaries, such as minor children or individuals with physical or mental disabilities. Costs can include additional legal requirements, such as ensuring compliance with tax laws and protection for the beneficiaries.

4. Ownership Trust

  • Cost: R12,000 to R14,000
  • Details: In an ownership trust, assets are transferred to the trustees for the benefit of the beneficiaries. This type of trust may require more extensive legal work depending on the assets being transferred and the trust’s complexity.

5. Bewind Trust

  • Cost: R14,000 to R25,000 or more
  • Details: A bewind trust is one in which the ownership of the assets is transferred directly to the beneficiaries, but trustees retain administrative control. Due to its complexity, the costs can be on the higher end of the scale.

6. Family Trust

  • Cost: R14,000 to R30,000 or more
  • Details: A family trust is often set up to manage and protect family assets for future generations. The cost can vary widely depending on the size and structure of the trust, as well as the legal and tax considerations.

Additional Costs to Consider:

  • Registration Fees: There are separate registration fees for submitting the trust deed to the Master of the High Court, typically ranging from R200 to R500.
  • Trustee Fees: Trustees often charge an annual fee for managing the trust, which can range from 0.5% to 2% of the trust’s value, depending on the agreement and the complexity of the trust’s assets.
  • Accounting and Auditing Fees: Depending on the trust’s size and complexity, professional fees for tax compliance, auditing, and accounting can range from R2,000 to R10,000 per year or more.

The exact cost will depend on the specific requirements of the trust and the professionals you engage. It is recommended to consult with a specialist trust attorney to get a more accurate quote based on your individual needs.

Required Documents for Trust Registration in South Africa

When registering a trust, certain documents must be submitted to the Master of the High Court:

  1. Trust Deed: The original trust deed or a notarially certified copy must be provided. This document outlines the terms, purpose, and structure of the trust.
  2. Proof of Payment: A receipt or proof of payment for the registration fee must accompany the registration documents.
  3. Application Form (J401): This form is the official application for trust registration and must be fully completed.
  4. Acceptance of Trusteeship Form (J417): Each appointed trustee completes this form to formally accept their role and responsibilities.
  5. Acceptance of Auditor Form (J405): Required if an auditor is appointed to oversee the trust’s financial activities.
  6. Beneficiary Declaration Form (J450): This form declares all beneficiaries of the trust, ensuring clarity about who the trust is meant to benefit.
  7. Certified Identification: Certified copies of ID, passport, or birth certificates are required for all trustees, beneficiaries, and other involved parties.
  8. Bond of Security by Trustees (J344): In cases where the Master’s office requires a security bond, trustees may need to provide this form to protect the beneficiaries’ interests.

Need Legal Expertise to Register a Trust? Contact Burger Huyser Attorneys Today

Registering a trust is a complex legal process that requires meticulous preparation of documents and adherence to specific requirements. At Burger Huyser Attorneys, we specialise in guiding clients through the steps of establishing a trust, from determining the most suitable type of trust to drafting a robust trust deed and managing registration requirements with the Master’s Office and SARS. Our team of trust specialists in South Africa provide tailored advice, helping you navigate the costs and benefits associated with different trust options.
If you’d like to investigate your options for creating a trust or want to learn more about trust costs in South Africa, contact Burger Huyser Attorneys today. Schedule an appointment with any of our skilled and professional trust lawyers in South Africa or contact us for immediate assistance on the numbers below:

Randburg call 061 516 6878; Roodepoort call 061 516 0091; Sandton call 064 555 3358;  Pretoria call 064 548 4838;

Centurion call 061 516 7117; Alberton call 061 515 4699; Bedfordview call 061 536 3223

DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE