Trusts are useful, but often misunderstood legal vehicles for protecting and managing assets in South Africa. We highly recommend consulting with our attorneys in Gauteng before you choose the type of trust to ensure you understand its benefits, limitations, tax implications, and legal status. Our attorneys work with trusts, estate planning, wills, and property transfers in Gauteng, and can thus provide you with expert guidance and professional assistance regarding all aspects of trusts.
How Trusts Can Be Classified
We recommend speaking to our attorneys for setting up or administering one of the types of trusts in South Africa listed below.
- The ownership trust is one where the founder transfers the asset ownership to trustees for holding in the trust to the benefit of defined trust beneficiaries.
- The bewind trust is a trust where the founder transfers asset ownership to the trust beneficiaries, with control vested in the trustees.
- The curatorship trust is one where the trustee or trustees are in administrative control of the assets in the trust to the benefit of the beneficiary, who does not have the capacity to manage the funds, such as where a person is disabled.
Trusts are furthermore classified according to the way they are formed. The inter vivos trust is one created for and during a person’s lifetime, while the testamentary trust is one that is set up according to a person’s will, and only comes into effect once the person passes away.
Our attorneys in Gauteng have extensive experience in forming, administering, and litigating disputes related to both types of trusts.
Trusts can also be classified according to the rights that beneficiaries gain. With the vesting trust, the beneficiaries have the vested rights regarding the income or assets of the trust. With the discretionary trust, the beneficiaries have contingent rights to the assets of the trust, with the discretion of how the assets or income from such is distributed vested in the trustees.
It is possible to combine the two types. We recommend seeking legal help from our team in Gauteng on how to do such and when the combination is relevant.
Uses of Trusts
The purpose of the trust is important. It can be a trading, asset protecting, charitable, or special trust. Keep in mind that trusts are taxable and must be managed according to legislative requirements.
Call on us for professional assistance in setting up a trust in South Africa.
Note: this article is for information purposes only and does not constitute legal advice. You are advised to consult with us before using/relying on this information. Information is relevant to the date of publishing.