Written by Mari van der Walt

31 July 2023

“Plant the seeds of your legacy through Estate Planning.”

What Is A Trust?

A trust is a legal arrangement whereby control over property (the trust property) is transferred to a person or organisation (the trustee) for the benefit of someone else (the beneficiary). Two types of trusts exist in South Africa, namely an inter vivos trust and a mortis causa trust (hereinafter referred to as a “testamentary trust”). A crucial step in the commissioning of a trust is the final step, which is the registration of the trust.

What is the difference between the registration of an inter vivo’s trust and a testamentary trust?

The main difference between these two trusts are their inception dates.

An inter vivos trust is registered while the trust’s founder is still alive. The trust deed is thus executed, and the trust can be formed and registered with the Master of the High Court at any given time.

On the contrary, a testamentary trust is only registered upon the passing of the founder (who is also the testator who commissioned the registration of a trust in their last will and testament). The trust will only be eligible for registration once the founder has passed. It is important to remember that a testamentary trust may only be formed if the testator expressly states it in their last will and testament and ensures that a compliant trust deed is annexed to the will.

Where is a trust registered?

The trust will be registered at the office of the Master of the High Court, having jurisdiction over the trust property. The location of the trust property determines jurisdiction. Thus, the Master of the High Court in whose jurisdiction the greatest portion of the trust assets are situated will have the relevant jurisdiction.

What is the first step when deciding to register a trust?

The first step would be to draft and execute a trust deed. The trust deed will be the compass for trustees and beneficiaries, directing them regarding the founder’s wishes and the operation of this trust daily and in the future.

The trust deed, in essence, is the structure of the trust, dictating how the trust is to operate and specifying the powers and limitations of the parties concerned.

Once the trust deed has been drafted and signed by the founder and trustees (in the case of an inter vivo’s trust) or signed only by the founder (in the case of a testamentary trust), the trust deed, together with supporting documentation will be lodged at the Master of the High Court.

How is a trust registered?

Upon completion of the trust deed, the following documentation will be lodged at the relevant Master of the High Court:

  • Cover Letter
  • Original trust deed
  • J401: The trust registration and amendment form
  • J405: Undertaking by the appointed auditor
  • J417: Acceptance of Trusteeship
  • Sworn Affidavit by an independent trustee (compulsory where a family business trust is created)
  • J450: Beneficiary declaration
  • JM21: sets out specific requirements and information that must be supplied to the Master of the High Court
  • Proof of payment for payment to the Department of Justice and Constitutional Development of the prescribed fee for the registration of the trust; the current fee is R250.00
  • Certified identity documents of all trustees
  • Certified identity document of the founder, alternative the company registration documentation, as well as a company resolution if the founder is a company
  • A letter of consent by the appointed accountant to be appointed as the accounting officer of the trust
  • An undertaking by the appointed accounting officer that they will:
    • Inform the Master of the High Court should they resign as accounting officer;
    • Ensure that the trust is administered in terms of the trust deed;
    • Inform the Master of the High Court of any material changes or irregularities.
  • Security: It is a requirement that security be furnished to the Master of the High Court by the nominated trustees to ensure they will duly comply with their duties before the trustees can be appointed. The founder can waive the requirement to furnish security to the Master of the High Court in the trust deed, where the founder will explicitly exempt the nominated trustees from furnishing security.

It is advisable that a copy of the above-mentioned documents is kept should the Master of the High Court lose any of the documentation lodged.

How will I know that my trust is registered?

Once all requirements as dictated by the Master of the High Court have been complied with, the relevant Master of the High Court will issue a letter of authority. This letter will reflect unique information about the trust, such as:

  • Trust registration number;
  • appointed trustees;
  • trust name;
  • Master’s office where the trust has been registered.

It is essential to note that no trustee may act as such without the written authority of the Master.

If the trust is amended or upon the termination of the trust, the original letter of authority must be returned to the Master of the High Court, whereafter the trust will be terminated; alternatively, a new letter of appointment will be issued reflecting the amended information.

How long does it take to register a trust in South Africa?

The time that it will take to register the trust solely depends on the relevant office of the Master, as the offices firstly have different systems and processes in place for due diligence, and secondly, variables such as load shedding, the centralised computer system being offline, staff shortages, etc.

The procedural aspect surrounding the registration of a trust should be left to an experienced person with the relevant expertise to ensure all directives and requirements as set by the Master are being complied with and that the trust is registered without any delays due to queries raised by the Master of the High Court.

From caring for your loved ones to securing your assets, a trust is an exceptionally viable and versatile vehicle for Estate Planning.

Contact the team at Burger Huyser Attorneys  and speak to one of our estate planning and trust specialists  to see to your trust registration needs.

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